Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Studies in Nonlinear Dynamics & Econometrics

Ed. by Mizrach, Bruce

5 Issues per year


IMPACT FACTOR 2017: 0.855

CiteScore 2017: 0.76

SCImago Journal Rank (SJR) 2017: 0.668
Source Normalized Impact per Paper (SNIP) 2017: 0.894

Mathematical Citation Quotient (MCQ) 2017: 0.02

Online
ISSN
1558-3708
See all formats and pricing
More options …
Ahead of print

Issues

A non-linear Keynesian Goodwin-type endogenous model of the cycle: Bayesian evidence for the USA

Theodore Mariolis / Konstantinos N. Konstantakis / Panayotis G. Michaelides
  • Corresponding author
  • Laboratory of Theoretical and Applied Economics, School of Applied Mathematics and Physics, National Technical University of Athens, Heroon Polytechneiou 9, 157.80, Zografou Campus, Athens, Greece, Phone: +302107721624, Fax: +302107721618
  • Systemic Risk Centre, London School of Economics, London, UK
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
/ Efthymios G. Tsionas
  • Athens University of Economics and Business, Athens, Greece
  • Lancaster University Management School, Lancaster, UK
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
Published Online: 2018-07-03 | DOI: https://doi.org/10.1515/snde-2016-0137

Abstract

This paper incorporates the so-called Bhaduri-Marglin accumulation function in Goodwin’s original growth cycle model and econometrically estimates the proposed model for the case of the US economy in the time period 1960–2012, using a modern Bayesian sequential Monte Carlo method. Based on our findings, the US economy follows an exhilarationist regime throughout our investigation period with the sole exception of an underconsumption regime for the time period 1974–1978. In general, the results suggest that the proposed approach is an appropriate vehicle for expanding and improving traditional Goodwin-type models.

This article offers supplementary material which is provided at the end of the article.

Keywords: Bayesian sequential Monte Carlo methods; Bhaduri-Marglin accumulation function; Goodwin type models; US economy

JEL Classification: B51; C11; C62; E32

References

  • Amadeo, E. J. 1986. “The Role of Capacity Utilization in Long-Period Analysis.” Political Economy 2 (2): 147–185.Google Scholar

  • Andronov, A. A., A. A. Vitt, and S. E. Khaikin. 1987. Theory of Oscillators. New York: Dover.Google Scholar

  • Barbosa-Filho, N. 2015. “Elasticity of Substitution and Social Conflict: A Structuralist Note on Piketty’s Capital in the Twenty-First Century.” Cambridge Journal of Economics 40 (4): 1167–1183.Google Scholar

  • Barbosa-Filho, N. H., and L. Taylor. 2006. “Distributive and Demand Cycles in the U.S. Economy – A Structuralist Goodwin Model.” Metroeconomica 57 (3): 389–411.CrossrefGoogle Scholar

  • Barrales, J., and R. von Arnim. 2017. “Longer-Run Distributive Cycles: Wavelet Decompositions for the US, 1948–2011.” Review of Keynesian Economics 5 (2): 196–217.CrossrefGoogle Scholar

  • Bhaduri, A. 2008. “On the Dynamics of Profit-Led and Wage-Led Growth.” Cambridge Journal of Economics 32 (1): 147–160.Google Scholar

  • Bhaduri, A., and S. Marglin. 1990. “Unemployment and the Real Wage Rate: The Economic Basis for Contesting Political Ideologies.” Cambridge Journal of Economics 14 (4): 375–393.CrossrefGoogle Scholar

  • Blecker, R. A. 1989. “International Competition, Income Distribution and Economic Growth.” Cambridge Journal of Economics 13 (3): 395–412.Google Scholar

  • Blecker, R. A. 2016. “Wage-Led Versus Profit-Led Demand Regimes: The Long and The Short of It.” Review of Keynesian Economics 4 (4): 373–390.CrossrefGoogle Scholar

  • Bowles, S., and R. Boyer. 1988. “Labor Discipline and Aggregate Demand: A Macroeconomic Model.” American Economic Review 78 (2): 395–400.Google Scholar

  • Canry, N. 2005. “Wage-Led Regime, Profit-Led Regime and Cycles: A Model.” Économie Appliquée 58 (1): 143–163.Google Scholar

  • Chopin, N. 2002. “A Sequential Particle Filter Method for Static Models.” Biometrika 89 (3): 539–551.CrossrefGoogle Scholar

  • Chopin, N. 2004. “Central Limit Theorem for Sequential Monte Carlo Methods and Its Application to Bayesian Inference.” Annals of Statistics 32 (6): 2385–2411.CrossrefGoogle Scholar

  • Chou, N.-T., A. Izyumov, and J. Vahaly. 2016. “Rates of Return on Capital Across the World: are They Converging?” Cambridge Journal of Economics 40 (4): 1149–1166.CrossrefGoogle Scholar

  • David, P. A. 1991. Computer and Dynamo: The Modern Productivity Paradox in a Not-Too-Distant Mirror, in OECD, Technology and Productivity. The Challenge for Economic Policy. Paris: OECD.Google Scholar

  • Dumenil, G., and D. Levy. 2001. “Periodizing Capitalism: Technology, Institutions and Relations of Production.” In Phases of Capitalism Development edited by R. Albritton, M. Itoh, R. Westra and A. Zuege, 141–162, London: Palgrave.Google Scholar

  • Durham, G., and J. Geweke. 2014. “Adaptive Sequential Posterior Simulators for Massively Parallel Computing Environments.” Advances in Econometrics 34: 1–44.CrossrefGoogle Scholar

  • Dutt, A. K. 1990. Growth, Distribution and Uneven Development. Cambridge: Cambridge University Press.Google Scholar

  • Eugeni, S. 2016. “Global Imbalances in the XIX, XX and the XXI Centuries.” Economics Letters 145: 69–72.CrossrefGoogle Scholar

  • Flaschel, P., and S. Luchtenberg. 2012. Roads to Social Capitalism. Theory, Evidence and Policy. Cheltenham: Edward Elgar.Google Scholar

  • Flaschel, P., G. Groh, G. Kauermann, and T. Teuber. 2009. “The Classical Growth Cycle After Fifteen Years of New Observations.” In Mathematical Economics and the Dynamics of Capitalism, edited by, P. Flaschel and M. Landesmann. London: Routledge.Google Scholar

  • Foley, D. K. 2003. “Endogenous Technical Change with Externalities in a Classical Growth Model.” Journal of Economic Behavior and Organization 52 (2): 167–189.CrossrefGoogle Scholar

  • Freeman, C. 1987. “Information Technology and the Change in Techno-Economic Paradigm.” In Technical Change and Full Employment, edited by, C. Freeman and L. Soete. Oxford: Basil Blackwell.Google Scholar

  • Gilks, W. R., and C. Berzuini. 2001. “Following a Moving Target: Monte Carlo Inference for Dynamic Bayesian Models.” Journal of the Royal Statistical Society B 63 (1): 127–146.CrossrefGoogle Scholar

  • Goldstein, J. P. 1996. “The Empirical Relevance of the Cyclical Profit Squeeze: a Reassertion.” Review of Radical Political Economics 28 (4): 55–92.CrossrefGoogle Scholar

  • Goodwin, R. M. 1967. “A Growth Cycle.” In Socialism, Capitalism and Economic Growth: Essays Presented to Maurice Dobb, edited by, C. H. Feinstein. London: Cambridge University Press.Google Scholar

  • Goodwin, R. M. 1986. “Swinging Along the Turnpike with von Neumann and Sraffa.” Cambridge Journal of Economics 10 (3): 203–210.CrossrefGoogle Scholar

  • Goodwin, R. M., and L. F. Punzo. 1987. The Dynamics of a Capitalist Economy: A Multi-Sectoral Approach. Cambridge: Polity Press.Google Scholar

  • Gordon, D. M. 1995. “Growth, Distribution, and the Rules of the Game: Social Structuralist Macro Foundations for a Democratic Economic Policy.” In Macroeconomic Policy after the Conservative Era, edited by, G. A. Epstein and H. A. Gintis. Cambridge: Cambridge University Press.Google Scholar

  • Julius, A. J. 2005. “Steady-State Growth and Distribution with an Endogenous Direction of Technical Change.” Metroeconomica 56 (1): 101–125.CrossrefGoogle Scholar

  • Kaldor, N. 1961. “Capital Accumulation and Economic Growth.” In The Theory of Capital, edited by F. A. Lutz and D. C. Hague, 177–222. New York, USA: St. Martins Press.Google Scholar

  • Kiefer, D., and C. Rada. 2015. “Profit Maximising Goes Global: The Race to the Bottom.” Cambridge Journal of Economics 39 (5): 1333–1350.CrossrefGoogle Scholar

  • Kurz, H. D. 1990. “Technical Change, Growth and Distribution: A Steady-State Approach to ‘Unsteady’ Growth.” In Capital, Distribution and Effective Demand. Studies in the ‘Classical’ Approach to Economic Theory, edited by, H. D. Kurz. Cambridge: Polity Press.Google Scholar

  • Kurz, H. D. 1994. “Growth and Distribution.” Review of Political Economy 6 (4): 393–420.CrossrefGoogle Scholar

  • Lavoie, M. 1995. “The Kaleckian Model of Growth and Distribution and its neo-Ricardian and neo-Marxian Critiques.” Cambridge Journal of Economics 19 (6): 789–818.Google Scholar

  • Lorenz, H.–W. 1989. Nonlinear Dynamical Economics and Chaotic Motion. Berlin: Springer-Verlag.Google Scholar

  • Marglin, S. A., and A. Bhaduri. 1988. “Profit Squeeze and Keynesian Theory.” World Institute for Development Economics Research of the United Nations University, Working Paper 39, April 1988.Google Scholar

  • Mariolis, T. 2013. “Goodwin’s Growth Cycle Model with the Bhaduri-Marglin Accumulation Function.” Evolutionary and Institutional Economics Review 10 (1): 131–144.CrossrefGoogle Scholar

  • Mohun, S. 2009. “Aggregate Capital Productivity in the US Economy, 1964–2001.” Cambridge Journal of Economics 33 (5): 1023–1046.CrossrefGoogle Scholar

  • Nikiforos, M., and D. K. Foley. 2012. “Distribution and Capacity Utilization: Conceptual Issues and Empirical Evidence.” Metroeconomica 63 (1): 200–229.CrossrefGoogle Scholar

  • Rodousakis, N. 2014. “The Stability Properties of Goodwin’s Growth Cycle Model with a Variable Elasticity of Substitution Production Function.” Studies in Microeconomics 2 (2): 213–223.CrossrefGoogle Scholar

  • Rodousakis, N. 2015. “Goodwin’s Growth Cycle Model with the Bhaduri-Marglin Accumulation Function: A Note on the C.E.S. Case.” Evolutionary and Institutional Economics Review 12 (1): 105–114.CrossrefGoogle Scholar

  • Rodrik, D. 2011. The Globalization Paradox. Why Global Market, States and Democracy Can’t Coexist. Oxford: Oxford University Press.Google Scholar

  • Rowthorn, B. 1981. “Demand, Real Wages and Economic Growth.” Thames Papers in Political Economy 3: 1–39.Google Scholar

  • Samuelson, P. A. 1971. “Generalized Predator-Prey Oscillations in Ecological and Economic Equilibrium.” Proceedings of the National Academy of Sciences USA 68 (5): 980–983.CrossrefGoogle Scholar

  • Sasaki, H. 2013. “Cyclical Growth in a Goodwin-Kalecki-Marx Model.” Journal of Economics 108 (2): 145–171.CrossrefGoogle Scholar

  • Shah, A., and M. Desai. 1981. “Growth Cycles with Induced Technical Change.” The Economic Journal 91 (364): 1006–1010.CrossrefGoogle Scholar

  • Skott, P. 2012. “Shortcomings of the Kaleckian Investment Function.” Metroeconomica 63 (1): 109–138.CrossrefGoogle Scholar

  • Skov A. M. 2004. Oil and Gas Energy in US Economy, SPE Annual Technical Conference and Exhibition, 26–29 September, Houston, Texas. https://doi.org/10.2118/90184-MS.

  • Sportelli, M. C. 1995. “A Kolmogoroff Generalized Predator-Prey Model of Goodwin’s Growth Cycle.” Journal of Economics 61 (1): 35–64.CrossrefGoogle Scholar

  • Stockhammer, E., and J. Michell. 2017. “Pseudo-Goodwin Cycles in a Minsky Model.” Cambridge Journal of Economics 41 (1): 105–125.CrossrefGoogle Scholar

  • Tavani, D. 2012. “Wage Bargaining and Induced Technical Change in a Linear Economy: Model and Application to the US (1963–2003).” Structural Change and Economic Dynamics 23 (2): 117–126.CrossrefGoogle Scholar

  • Tavani, D. 2013. “Bargaining Over Productivity and Wages when Technical Change is Induced: Implications for Growth, Distribution, and Employment.” Journal of Economics 109 (3): 207–244.CrossrefGoogle Scholar

  • Tavani, D., and L. Zamparelli. 2015. “Endogenous Technical Change, Employment and Distribution in the Goodwin Model of the Growth Cycle.” Studies in Nonlinear Dynamics and Econometrics 19 (2): 209–226.Google Scholar

  • Tavani, D., and L. Zamparelli. 2017. “Endogenous Technical Change in Alternative Theories of Growth and Distribution.” Journal of Economic Surveys 31 (5): 1272–1303.CrossrefGoogle Scholar

  • Tavani, D., P. Flaschel, and L. Taylor. 2011. “Estimated Non-Linearities and Multiple Equilibria in a Model of Distributive-Demand Cycles.” International Review of Applied Economics 25 (5): 519–538.CrossrefGoogle Scholar

  • Veneziani, R. and S. Mohun. 2006. “Structural Stability and Goodwin’s Growth Cycle.” Structural Change and Economic Dynamics 17 (4): 437–451.CrossrefGoogle Scholar

  • Vercelli, A. 1984. “Fluctuations and Growth: Keynes, Schumpeter, Marx and the Structural Instability of Capitalism.” In Nonlinear Models of Fluctuating Growth, edited by, R. M. Goodwin, M. Krüger and A. Vercelli. Berlin: Springer.Google Scholar

  • van der Ploeg, F. 1987. “Growth Cycles, Induced Technical Change, and Perpetual Conflict Over the Distribution of Income.” Journal of Macroeconomics 9 (1): 1–12.CrossrefGoogle Scholar

  • von Arnim, R., and J. Barrales. 2015. “Demand-Driven Goodwin Cycles with Kaldorian and Kaleckian Features.” Review of Keynesian Economics 3 (3): 351–373.CrossrefGoogle Scholar

  • von Arnim, R., D. Tavani, and L. Carvalho. 2014. “Redistribution in a Neo-Kaleckian Two-Country Model.” Metroeconomica 65 (3): 430–459.CrossrefGoogle Scholar

  • Wolff, E. N. 2006. “The Growth of Information Workers in the US Economy, 1950–2000: The Role of Technological Change, Computerization, and Structural Change.” Economic Systems Research 18 (3): 221–255.CrossrefGoogle Scholar

  • Wolff, E. N. 2003. “What’s Behind the Rise in Profitability in the US in the 1980’s and in the 1990’s?” Cambridge Journal of Economics 27 (4): 479–499.CrossrefGoogle Scholar

  • Zamparelli, L. 2015. “Induced Innovation, Endogenous Technical Change and Income Distribution in a Labor Constrained Model of Classical Growth.” Metroeconomica 66 (2): 243–262.CrossrefGoogle Scholar

About the article

Published Online: 2018-07-03


Citation Information: Studies in Nonlinear Dynamics & Econometrics, 20160137, ISSN (Online) 1558-3708, DOI: https://doi.org/10.1515/snde-2016-0137.

Export Citation

©2018 Walter de Gruyter GmbH, Berlin/Boston.Get Permission

Supplementary Article Materials

Comments (0)

Please log in or register to comment.
Log in