Quotation Taylor, Lance, Foley, Duncan, Rezai, Armon. 2018. Demand drives growth all the way: Goodwin, Kaldor, Pasinetti and the Steady State. Cambridge Journal of Economics.


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Abstract

A demand-driven alternative to the conventional Solow–Swan growth model is analysed. Its medium run is built around Marx–Goodwin cycles of demand and distribution. Long-run income and wealth distributions follow rules of accumulation stated by Pasinetti in combination with a technical progress function for labour productivity growth incorporating a Kaldor effect and induced innovation. An explicit steady state solution is presented along with analysis of dynamics. When wage income of capitalist households is introduced, the Samuelson–Modigliani steady state ‘dual’ to Pasinetti’s cannot be stable. Numerical simulation loosely based on US data suggests that the long-run growth rate is around 2% per year and that the capitalist share of wealth may rise from about 40 to 70% due to positive medium-term feedback of higher wealth inequality into its own growth.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Cambridge Journal of Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new VW-D, WH-B
Language English
Title Demand drives growth all the way: Goodwin, Kaldor, Pasinetti and the Steady State
Year 2018
Reviewed? Y
DOI http://dx.doi.org/10.1093/cje/bey045
Open Access N

Associations

People
Rezai, Armon (Details)
External
Foley, Duncan (New School for Social Research, United States/USA)
Taylor, Lance (New School for Social Research, United States/USA)
Organization
Institute for Ecological Economics IN (Details)
Economics of Inequality FI (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
2928 Environmental economics (Details)
5325 Political economics (Details)
5334 Political economic policy (Details)
5335 Political economic theory (Details)
5341 Economic policy (Details)
5353 Environmental economics (Details)
5924 Environmental economics (Details)
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