Engelbert Stockhammer
Pseudo-Goodwin cycles in a Minsky model
Stockhammer, Engelbert; Michell, Jo
Abstract
Goodwin cycles result from the dynamic interaction between a profit-led demand regime and a reserve army effect in income distribution. The paper proposes the concept of a pseudo-Goodwin cycle. We define this as a counter-clockwise movement in output and wage share space which is not generated by the usual Goodwin mechanism. In particular, it does not depend on a profit-led demand regime. To illustrate this, a simple Minsky-type model is extended by a reserve army distribution adjustment. In this model the cycle is generated by the interaction of financial fragility and demand. The wage share rises at higher levels of output but this generates no feedback so that, by design, demand does not react to changes in income distribution. But the model does exhibit a pseudo-Goodwin cycle in the output-wage share space. This holds true even if we introduce a wage-led demand regime. This demonstrates that the existence of a counter-clockwise movement of output and the wage share cannot be regarded as proof of the existence of a Goodwin cycle and a profit-led demand regime.
Citation
Stockhammer, E., & Michell, J. (2014). Pseudo-Goodwin cycles in a Minsky model
Publication Date | May 1, 2014 |
---|---|
Publicly Available Date | Mar 28, 2024 |
Peer Reviewed | Peer Reviewed |
Keywords | business cycles, Goodwin cycle, Minsky cycle, financial fragility, distribution cycles, Post Keynesian economics |
Public URL | https://uwe-repository.worktribe.com/output/818484 |
Publisher URL | http://www.postkeynesian.net/downloads/wpaper/PKWP1405.pdf |
Related Public URLs | http://www.postkeynesian.net/working_papers.html http://www.postkeynesian.net/ |
Files
PKWP1405.pdf
(740 Kb)
PDF
You might also like
The macroeconomics of austerity
(2023)
Report
Institutional supercycles: An evolutionary macro-finance approach
(2023)
Journal Article
The dangerous fiction of the "fiscal black hole"
(2022)
Report
FX swaps, shadow banks and the global dollar footprint
(2022)
Journal Article
Downloadable Citations
About UWE Bristol Research Repository
Administrator e-mail: repository@uwe.ac.uk
This application uses the following open-source libraries:
SheetJS Community Edition
Apache License Version 2.0 (http://www.apache.org/licenses/)
PDF.js
Apache License Version 2.0 (http://www.apache.org/licenses/)
Font Awesome
SIL OFL 1.1 (http://scripts.sil.org/OFL)
MIT License (http://opensource.org/licenses/mit-license.html)
CC BY 3.0 ( http://creativecommons.org/licenses/by/3.0/)
Powered by Worktribe © 2024
Advanced Search