info:eu-repo/semantics/article
GROWTH CYCLES IN MATURE AND DUAL ECONOMIES
GROWTH CYCLES IN MATURE AND DUAL ECONOMIES
Registro en:
10.5902/2526629269896
Autor
Skott, Peter
Institución
Resumen
Mature economies may experience fluctuations, but the average medium and long run growth rate matches the natural rate. Like Kaldor's neo-Keynesian models, the Marx-Goodwin tradition explains this outcome by endogenizing the distribution of income and assuming that the accumulation of capital is increasing as a function of the profit share. The application of Goodwin cycles to developing economies may be hard to justify, however. The modified Goodwin models in this paper include relative-wage norms as a central element of wage formation. Norms change endogenously, leading to path dependence (hysteresis) in the stationary solution for the employment share of the modern sector. The effects of shocks – the sensitivity of the long-run outcome to initial conditions – may be amplified by non-linearities in the adjustment of wages to deviations of actual wages from the norm. Mature economies may experience fluctuations, but the average medium and long run growth rate matches the natural rate. Like Kaldor's neo-Keynesian models, the Marx-Goodwin tradition explains this outcome by endogenizing the distribution of income and assuming that the accumulation of capital is increasing as a function of the profit share. The application of Goodwin cycles to developing economies may be hard to justify, however. The modified Goodwin models in this paper include relative-wage norms as a central element of wage formation. Norms change endogenously, leading to path dependence (hysteresis) in the stationary solution for the employment share of the modern sector. The effects of shocks – the sensitivity of the long-run outcome to initial conditions – may be amplified by non-linearities in the adjustment of wages to deviations of actual wages from the norm.