Long-run convergence in a neo-Kaleckian open-economy model with autonomous export growth

This study combines a neo-Kaleckian growth and distribution model with a sort of Sraffian supermultiplier mechanism in which autonomous demand is driven by foreign exports. Short-, medium- and long-run equilibria are considered. In the long-run case, the expectations of sales growth governing investment change adaptively, and this, combined with the autonomous growth rate of exports, produces convergence of the actual rate of capacity utilization to its normal rate. It is demonstrated that some aspects of the main Kaleckian results can be preserved not only in the short or medium run but also in the long run, in the sense that both (1) a decrease in the propensity to save, and (2) a change in income distribution favoring labor, bring about higher average rates of production growth and capital accumulation. However, the impact of a change in the profit share is shown to be subjected to the condition that the responsiveness of the real exchange rate with respect to the profit share has to be bounded from above, confirming that the scope for wage-led demand or wage-led growth can be limited by open-economy considerations, even within the supermultiplier context.     

Growth,Distribution, and External Constraints: A Post-Kaleckian Model Applied to Brazil

ABSTRACT

The purpose of this research is to analyze whether the Brazilian economy behaved under a wage-led or profit-led regime between 1960 and 2011, considering a Post-Kaleckian model in a context of external constraints. The time span is limited by data availability (i.e., 2011). To answer the question of whether the Brazilian economy works under a wage-led or profit-led regime, we propose a simple Post-Kaleckian model. The model suggests that a profit-led regime is more probable for Brazil. Moreover, a wage-led regime occurs when a balance of payments constrained growth model is taken into consideration. Likewise, the real exchange rate has a positive impact on economic growth through the export channel. This result is a novelty in the recent literature about the relationship between real exchange rate and economic growth within a Post-Kaleckian model. The Brazilian economy was chosen as it is one of the biggest economies in Latin America.     

Inflation and capital accumulation in an OLG model with money in the production function

This article analyses the consequences of the money supply growth rate on capital intensity and economic growth in an overlapping-generations model with real balances entering the production function. Within this theoretical framework, anticipated inflation generates an ambiguous effect on capital–labour ratio, because two forces work simultaneously in opposite directions: one driving towards a pure Tobin effect (due to the OLG demographic structure of the economy) and the other pushing down the capital stock (due to the productive role of real balances). Despite the unclear effects exerted on capital intensity, higher monetary growth rates unambiguously reduce real money demand, consumption, total wealth and welfare.     

Technology, demand and distribution: a cumulative growth model with an application to the Dutch productivity growth slowdown

This paper argues that the case for real wage growth restraint,and the consequent restoration of profitability, which the mainstreamconsensus regards as a necessary condition for sustained outputand productivity growth, is based on weak foundations, becauseit neglects the negative impact of wage moderation on productivitygrowth. Using a general Keynesian growth model, which integratesa (wage-led or profit-led) demand regime and a productivityregime (incorporating the productivity-growth enhancing effectsof higher demand and higher real wages), the conditions areidentified under which real wage restraint fails to raise outputand productivity growth. The model is applied empirically tothe Netherlands (1960–2000).     

How important is the stock market wealth effect on consumption in India?

We examine how shocks emanating from changes in the stock wealth affect the consumption demand in India using a Bayesian VAR framework. The effect of the stock market wealth shock on consumption demand in India is relatively small in magnitude. The estimates suggest that a 10% increase in the real stock wealth raises the consumption demand by 0.3%, which seems to be consistent with some empirical estimates for the emerging market economies given a relatively low share of stock wealth in the household asset portfolio and its asymmetric distribution. The stock market wealth effect being short run in nature does not have a large and persistent effect on consumption demand since consumers may not perceive the changes in the stock wealth to cause a permanent shift in their wealth.     

Wealth effects on money demand in the euro area

We investigate the determinants of money demand (M3) in the euro area, considering that this variable remains an important co-determinant of monetary policy making by the European Central Bank. Regressing the real stock of M3 on real GDP, interest rates and wealth variables (real housing and stock prices) within an error-correction framework provides evidence of positive wealth effects on money demand in the long run. Correcting for this wealth effect, money demand in the euro area has grown almost exactly in line with the official reference value of 4 1/2% per annum. This article builds on research that was conducted in preparation of the annual OECD Economic Survey of the euro area and reported in Boone et al. (2004). The authors thank their colleagues in the Economics Department and the European Central Bank and two anonymous referees for their valuable comments. The authors assume full responsibility for any remaining errors and omissions. The opinions expressed in this article do not necessarily represent those of the OECD or its member countries     

巴菲特与索罗斯财富策略评析

巴菲特通过股票市场投资实体经济企业,获得财富长期稳定增长的事实,证明了马克思主义财富来源于实体经济以及实体经济对虚拟资本起决定作用的观点;索罗斯虚拟资本投机获得财富快速波动性增长的事实,则证明虚拟资本市场运作是财富的分配与再分配,虚拟资本对实体经济有反作用。     

Productivity,real exchange rate,and aggregate demand: An empirical exercise applied to Brazil from 1960 to 2011

This research analyzes, from a post Kaleckian perspective, the interactions among the aggregate demand, the real exchange rate, productivity, and real wages in the Brazilian economy from 1960 to 2011. It adopts the longstanding perspective that demand is the driver of capital accumulation and economic growth. The research comprises the following steps: (a) a critical assessment of the growth regime literature, with a particular emphasis on issues related to productivity and the real exchange rate; (b) understanding the relationship between the real exchange rate and the productivity and growth regimes; (c) proposing a theoretical model that relates the real exchange rate, productivity, and the growth regime; and (d) an empirical test of the interaction between the real exchange rate, productivity, and the growth regime. Theoretically the study develops a model showing the interactions between the aggregate demand, the real exchange rate, productivity, and real wages. Furthermore, this research attempts to address the lack of theoretical and empirical studies about the relationship between the aggregate demand, the real exchange rate, productivity and real wages.     

Fiscal policy,government debt,and economic growth in the Kaleckian model of growth and distribution

This article presents the Kaleckian model of growth and distribution that sets a budget deficit ratio as an indicator of fiscal policy and examines the short- and long-run effects of an increase in budget deficits and a rise in income tax rates on the economy. The key short-run outcomes are as follows. First, expanded budget deficits have a positive effect on the rate of capacity utilization. Second, the tax rate for wage income does not affect the rate of capacity utilization, whereas the tax rate for capital income has a favorable impact on it. This result implies that raising the tax rate for capital income can be an important policy instrument for stimulating the economy. Third, we find that the economy exhibits a wage-led aggregate demand in the short run. The main long-run results are as follows. First, the effect of expanded budget deficits on the growth rate is ambiguous, since a higher debt burden negatively influences the rate of capacity utilization and hence economic growth, despite the increase in demand caused by government borrowing. A higher budget deficit ratio thus raises the growth rate only if a certain condition is satisfied. Second, the tax rate for capital income has a positive impact on the growth rate. Third, the economy shows a wage-led growth in the long run.     

资本市场发展影响货币需求的实证研究

从理论上分析,资本市场发展对货币需求存在正向影响的财富效应和负向影响的替代效应,但对中国的资本市场发展及货币需求数据进行实证分析发现,资本市场发展提高了经济体的货币需求;股票成交金额的变动有助于我们对于狭义货币供应量的预测,不过在统计上无助于我们对于广义货币供应量的预测。考虑到资本市场发展因素,货币政策从紧的力度应该比单纯考虑实体经济货币需求的从紧力度略松。     

上市公司、资本虹吸与房价的地区差异

鉴于上市公司与房价地区差异的研究鲜见,文章首次从地区层面寻找上市公司影响房价的微观传导路径.研究发现,上市公司从一级市场上融资、内部人在二级市场上减持均会"虹吸"全国资金,增加当地货币资本,进而正向影响房价,即高融资或高减持地区成为"虹吸方";融资虹吸与减持虹吸对房价的影响存在差异,减持虹吸引起财富集聚,对房价的影响更多地由富裕阶层的购房需求所推动,而融资虹吸带来的财富影响比较分散.地区股票市值与房价呈现螺旋增长关系,在股市上涨期间替代效应占主导地位,两者的增长率负相关;而在下跌期间财富效应占主导地位,两者的增长率正相关.文章从企业层面阐释了房价地区差异的金融成因及路径,并试图厘清股票市场与房价的增长结构,为地区经济的协调发展提供了参考.     

Capital Trading,Stock Trading,and the Inflation Tax on Equity

A market for used capital goods, or financial instruments that represent the ownership of the used capital goods, induces inflation taxes on wealth and on the nominal income flows that they provide. This paper explicitly introduces trading in either used capital goods or financial instruments into the standard stochastic growth model with money and production. These two monetary economies are equivalent. The value of the firm is equal to the firm's capital stock divided by inflation. The resulting asset-pricing conditions indicate that the effect of inflation on asset returns differs from the effects found in the literature by the addition of a significant wealth tax. Journal of Economic Literature Classification Numbers: E0, E4, E5.     

Investment and the rate of profit in a financial context: the French case

The growth regime prevailing in France since the middle of the 1980s allowed for a recovery of profitability, yet without durable resumption of growth or accumulation of fixed capital. The financialization of this growth regime shows on both the asset and liability sides of the balance sheets. Following a post‐Keynesian framework, we analyse and test the main determinants of real investment and financial capital accumulation for non‐financial companies in France, based on data from the flow‐of‐funds accounts. This analysis points to an arbitrage, prevailing between real and financial accumulation, as a key reason explaining the insufficient recovery of investment.     

Functional distribution of income,aggregate demand,and economic growth in the Chinese economy, 1978–2007

This paper seeks to analyse the relationship between the functional distribution of income, aggregate demand and growth in the Chinese reform economy. For this purpose, the Bhaduri-Marglin Model is used to indicate the theoretical possibility of both profit-led and wage-led growth regimes. Previously, the principal literature on the evolution of factor shares in China was reviewed. The statistical series for the period 1978–2007 are reconstructed to carry out our analysis of the relations between capital share and investment, on one hand, and labour share and consumption, on the other. Supported by empirical analysis and the model estimations, it is argued that Chinese growth has been profit-driven. Finally, the implications are presented concerning Chinese economic prospects.     

Household Debt,Dynamic Stability,and Change in Demand Creation Patterns

This paper examines dynamic stability and demand creation patterns of an economy in the context of the augmentation of household debt. First, we investigate the dynamic characteristics specific to an economy with household borrowing. Second, we reveal how demand creation and economic growth pattern change with the introduction of households' active borrowing. Our results shows that it is more favorable for the stability of an economy to politically control the interest rate on lending rather than to leave it to be determined by private financial institutions. Our results also indicate that even if the demand regime is wage-led, paradoxically, a rise in wage share may not necessarily stimulate economic growth. On the other hand, profit-led growth is more likely.     

Social security in a Classical growth model

This paper develops a growth model with overlapping generationsof workers who save for life-cycle reasons and Ricardian capitalistswho save from a bequest motive. The population of workers accommodatesgrowth, so that the rate of capital accumulation is endogenousand determines the growth of employment. Two regimes are possible,one in which workers' saving dominates the long run and a secondin which the long-run equilibrium growth rate is determinedcompletely by the capitalist saving function, sometimes calledthe Cambridge equation. The second regime exhibits a versionof the Pasinetti paradox: changes in workers' saving affectthe level, but not the growth rate, of capital in the long run.Applied to social security, this result implies that an unfundedsystem relying on payroll taxes reduces workers' lifetime wealthand saving, creating level effects on the capital stock withoutaffecting its long-run growth rate. These effects are mitigatedby the presence of a reserve fund, various levels of which areexamined. Calibrating the model to realistic parameter valuesfor the US facilitates an interpretation of the controversiesover the percentage of the national wealth originating in life-cyclesaving and the effects of social security on saving. The modelis offered as an analytical framework for the review of currenttopics in fiscal policy, in particular identifying the socialsecurity reserve fund as a potential vehicle for generatingcapital accumulation and effecting a progressive redistributionof wealth.     

Functional income distribution and aggregate demand in the Euro area

An increase in the wage share has contradictory effects on thesubaggregates of aggregate demand. Private consumption expendituresought to increase because wage incomes typically are associatedwith higher consumption propensities than capital incomes. Investmentexpenditures ought to be negatively affected because investmentwill positively depend on profits. Net exports will be negativelyaffected because an increase in the wage share corresponds toan increase in unit labour costs and thus a loss in competitiveness.Therefore, theoretically, aggregate demand can be either wage-ledor profit-led depending on how these effects add up. The resultswill crucially depend on how open the economy is internationally.The paper estimates a post-Kaleckian macro model incorporatingthese effects for the Euro area and finds that the Euro areais presently in a wage-led demand regime. Implications for wagepolicies are discussed.     

STOCKS AND DEPRECIATION OF HUMAN CAPITAL: NEW EVIDENCE FROM A PRESENT-VALUE PERSPECTIVE

Responding to a perceived growing interest in human wealth estimates, this paper offers a framework for measuring the aggregate stock of human capital and then implements the procedure for the United States male population age 14 to 75. Unlike previous estimates of human wealth that are based upon historical or resource costs, these estimates measure the capital stock as the discounted resent-value of expected lifetime returns. In the estimation, returns are equated with earnings data from the 1970 U.S. Census 15 percent Public Use Sample for out-of-school males, adjusted for employment and survival probabilities, adjusted for an assumed exogenous growth in future earnings, and discounted at 7.5 percent.
We provide cross-sectional estimates of individual stocks of human capital by age and educational attainment, as well as expected lifetime wealth profiles for individuals by level of education. These individual profiles can be used to obtain direct estimates of age-specific depreciation which suggest human capital is subject to significant and prolonged appreciation before nearly straight-line depreciation begins around middle age. This finding is all the more significant since resource-cost estimates of human capital which must assume a depreciation pattern to obtain stocks have always imposed a much faster rate much sooner.
Finally, an aggregate estimate of the stock of human capital for all males is supplied and its sensitivity to the choice of the discount rate, tax laws, and expected exogenous growth is analyzed. This seemingly-conservative stock estimate is then compared to a much lower resource-cost estimate offered recently by John Kendrick. A discount rate over 20 percent would be needed to equate the two measures. In trying to reconcile the two figures, we raise some new questions about the validity of both approaches for human capital accounting.     

Was Ireland's Celtic Tiger Period Profit-led or Wage-led?

This paper examines the macroeconomic performance of the Irish economy in the years leading up to the Celtic Tiger period and afterward, from 1980 to 2011. The goal of the paper is to determine how a severe recession in the 1980s could be followed so quickly by the unprecedented boom years of the Celtic Tiger, and followed again by the marked economic downturn since 2007. I build a Keynesian model of growth that integrates effective demand and productivity regimes to allow for the possibility that a redistribution of income can either spur or retard growth, depending on whether the regime is wage-led or profit-led. Using data for the Irish economy I test this model for wage-led or profit-led growth, finding plausible evidence that the Celtic Tiger years were, in fact, profit led.     

An estimate of the capital stock for the Belgian industrial sector

The paper submitted for publication considers the conditions for and the construction of a capital stock series, consistent with all macroeconomic relations. A careful study of the literature has shown that most existing and widely used capital stock series do not meet that requirement. A generative method with a general model for the real sector is proposed. The choice of the parameters of this model was decided upon the general consistency with the main macroeconomic aggregates. The results are compared with existing series of capital stock. What was obtained was a capital stock series that gives non-diverging results for the macroeconomic series when using the capital stock in alternative specifications. The main conclusions on depreciation rate, capital stock, technological change, return on capital and share of capital are condensed in a set of tables and diagrams.