Growth, cycles and residential investment

Arbeitspapier

The empirical literature on neo-Goodwinian models of growth and distribution still lacks an explicit treatment of capital accumulation. Further, and across different theoretical approaches, residential investment is seen as a critical driver of the business cycle. This paper addresses these two issues. First, through four- and five-dimensional Structural Vector Autoregressive (SVAR) models, cyclical trajectories derived from impulse-response functions confirm profit-led demand and profit-squeeze distribution regimes, in accordance with the cyclical stylized facts in the vein of Goodwin (1967). Second, aggregate investment is then split into its residential and nonresidential categories. Results confirm that residential investment leads the cycle, whereas nonresidential investment lags it. Finally, this study argues that residential investment is, in reality, undertaken by corporations-and not households-, and can therefore not be seen as autonomous to the business cycle, demographics, and financial variables.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2022-04

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Investment; Capital; Intangible Capital; Capacity ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Aggregate Factor Income Distribution ; Business Fluctuations; Cycles
• Subject: Cyclical growth ; Residential investment ; Labor share of income

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Santetti, Marcio ; Nikiforos, Michalis ; Von Arnim, Rudiger
• Event: Veröffentlichung
• (who): The University of Utah, Department of Economics
• (where): Salt Lake City, UT
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/283992
• Last update: 10.03.2025, 11:47 AM CET