1,720,969 research outputs found
Structural Change, Institutions and the Dynamics of Labor Productivity in Europe
Full text linkThe objective of this paper is to explain the reasons behind the dynamics of labor productivity (LP) growth during a process of institutional and structural change. We show - by means of a theoretical discussion and an empirical analysis, conducted on a sample of 25 European countries for the period 1995–2016 - that four main channels contribute to explaining the evolution of LP. First, the speed of investment, which incorporates innovation and favors an increase of LP growth; second, the speed of Research and Development (R&D), which allows for the creation of new ideas and shows the “dynamism of a society”, having positive effects on LP; third, the deregulation of labor markets and the increase of temporary employment, both of which encourage labor-intensive strategies by firms, with low value-added and low productivity gains; fourth, the direction of structural change, which can take place toward services industries affected by “Baumol’s disease”.1 Introduction 2 Structural change and labor productivity: A brief review 3 Labor flexibility and productivity 4 Toward a model of labor productivity: Institutions, investment and innovation 5 The model 6 Concluding remarks Footnotes Notes Appendix Reference
The relation between Keynesian monetary theory and demand-led growth: a Sraffian exploration
Full text linkThis article integrates the Sraffian approach to demand-led growth theory with insights from Keynes’s concept of finance and from the monetary circuit approach. The paper’s first contribution is the extension of Garegnani’s interpretation of Keynes’s General Theory’s originality and limitations to Keynes’s 1937–1938 papers on ‘finance.’ In both cases, it is a question of freeing Keynes from the ties of Marginalist theory. Second, the paper identifies a complementarity between the Keynesian concept of finance, some insights from the monetary circuit, and the role attributed by the Sraffian take of demand-led growth to the autonomous components of demand, which are also Kalecki’s external markets. Finally, the authors propose a subsidiary role for the liquidity-preference theory in the context of the determination of the structure of interest rates, given the short-term base rate set by monetary authorities
Growth Theory and the Growth Model Perspective: Insights from the Supermultiplier
No full textRecently, demand-led growth theories reshaped the study of comparative political economy. Since the Baccaro and Pontusson critique of Varieties of Capitalism, a new wave of studies has sought to analyze national economies in terms of their main demand drivers of growth. Post-Keynesian authors provided extensions to perfect the fit between demand-led growth theories and comparative political economy. We argue that the Sraffian supermultiplier provides a growth theory compatible with the growth model perspective advanced by Baccaro and Pontusson and has advantages over Kaleckian and New Keynesian approaches. The concept of autonomous demand, which comprises government spending, export, and debt-financed consumption, is already central for the studies of growth models, and the supermultiplier provides a theory that coherently understands the relation between the autonomous demand drivers and the other induced components of demand. We demonstrate our arguments by decomposing the growth of four advanced economies: the United States, Germany, Japan, and Sweden. The decomposition shows the importance of separating the autonomous from the induced components and highlights the relevance of public expenditures and exports as growth drivers in advanced economies
Cross-border financial flows and global warming in a two-area ecological SFC model
Full text linkHighlights
•The search for safe financial assets can affect economic growth and financial stability.
•The search for green financial assets can exacerbate climate change if capitals are free and exchange rates are floating.
•Lacking a strong coordination, green government policies are likely to generate negative side effects for other areas.
•Ecological efficiency gains are likely to be offset by the higher growth rate of the economy (rebound effect).
•The effectiveness of green behaviours and policies depends on the impact of cross-border financial flows on exchange rates
Normal utilization as the adjusting variable in Neo-Kaleckian growth models: A critique
No full textAs well-known, the canonical Neo-Kaleckian growth model fails to reconcile actual and normal rates of utilization in equilibrium. Some recent contributions revive an old proposal for solving this problem—making the normal rate of utilization an endogenous variable that converges to the actual utilization rate—justifying it with new, micro-founded premises. We argue that these new justifications for the convergence of normal to actual utilization do not stand closer scrutiny. First, the proposed microeconomic model relies on various restrictive assumptions, some of which are mutually inconsistent. Second, the derivation of the macroeconomic adjustment mechanism from the microeconomic analysis involves a logical leap that can be justified only by a very arbitrary assumption with little economic justification. Finally, we discuss the way in which this mechanism has been incorporated into the Neo-Kaleckian growth model by proposers of this approach. We show that, even if one puts aside, for the sake of argument, the first two points, the existence of autonomous components of demand is sufficient to invalidate the resulting macroeconomic model
Long-run Effective Demand in the US Economy: An Empirical Test of the Sraffian Supermultiplier Model
No full textThe Sraffian supermultiplier is a model of demand-led growth that stresses the importance of the autonomous components of aggregate demand (exports, public spending and autonomous consumption). This article tests empirically some major implications of the model employing macroeconomic data for the United States. In particular, we study the long-run relation between autonomous demand and output through cointegration analysis. The results suggest that autonomous demand and output are cointegrated and that autonomous demand exerts a long-run effect on output. There is also some evidence of simultaneous causality, especially in the short-run. Movements in autonomous demand and in the investment share are also found to be positively related, with Granger-causality going from Z to I/Y
“Inequality, financialisation and economic decline”
No full textThe objective of this article is to argue that the labor productivity slowdown experienced in recent years by several advanced countries can be explained, following a Kaldorian-Classical approach, by a weak gross domestic product (GDP) performance and by a decline in the wage share. Moreover, drawing inspiration from recent post Keynesian literature, the authors identify the ongoing worsening in income equality and the increase in the degree of financialization as other major explanatory factors of sluggish productivity. The article will provide a brief literature review concerning nonmainstream attempts to endogenize labor productivity, beginning from the famous Verdoorn-Kaldor law (Verdoorn, 1949) and the Kaldor technical progress function (Kaldor, 1961) and including Sylos Labini’s productivity equation (Sylos Labini, 1984, 1999). The authors will then discuss how labor flexibility and shareholder value orientation, one of the main aspects of financialization, can negatively affect equality and labor productivity. Finally, they propose an extended version of the Sylos Labini’s equation, where productivity growth is claimed to depend positively on GDP rate of growth and the wage share, and negatively on income inequality and financialization. They submit to empirical scrutiny their extended productivity equation; the results of their estimations provide support to their theoretical argument
Labour share decline, financialisation and structural change
No full textThe purpose of this article is to explain the determinants behind the decline of labour share in the last three to four decades in OECD countries. In our view, this decline was determined by financialisation and was deepened by the structural changes that occurred almost simultaneously in those economies. Financialisation, or finance-dominated capitalism, from the 1980s onwards, was a key element in the strategic offensive of the advanced countries’ dominant classes to appropriate higher shares of national income and to restore their control over the political process, a control that had been threatened by a generalised advancement of the labour movement in the 1970s. The development of a finance-dominated capitalism was helped by the process of globalisation, which affected not only OECD countries but also many others. A new, though unstable, macroeconomic model emerged, which we will call financial capitalism. In financial capitalism, trade unions lost power vis-à-vis capital, labour flexibility increased enormously, and a structural change from manufacturing to services was accelerated in rich countries. This resulted in negative consequences for labour share and income inequality. After having provided a theoretical discussion of the determinants of the compression of the wage share, making reference to the relevant literature, we submit our hypotheses to empirical scrutiny, performing a panel data analysis on 28 OECD Countries. The results of the estimations provide support to the theoretical argument
Economy-Finance-Environment-Society Interconnections in a Stock-Flow Consistent Dynamic Model
No full textThis work takes inspiration from four theoretical strands: recent developments in ecological macroeconomics; the Schumpeterian framework of evolutionary economics that emphasises the entrepreneurial role of the State; the stock-flow consistent approach to macroeconomic modelling; and the supermultiplier model. Building upon these approaches, we develop a formal model that reproduces key interactions between the economy, the financial sector, the ecosystem and the society. We test and assess the effects of several fiscal policies. We find that, in principle, mission-oriented innovation policies are the most effective option in supporting innovation and growth, while reducing income inequality. However, lacking a ‘green’ and progressive taxation system, they are unlikely to reverse the current trend in atmospheric temperature
- …
