Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297129 
Year of Publication: 
2023
Series/Report no.: 
LEM Working Paper Series No. 2023/21
Publisher: 
Scuola Superiore Sant'Anna, Laboratory of Economics and Management (LEM), Pisa
Abstract: 
The purpose of this work is to study the joint interaction of three founding elements of modern capitalism, namely endogenous technical change, income distribution and labour markets, within a low-dimensional nonlinear dynamic setup extending the Goodwin model. By going beyond the conservative structure typical of the predator-prey model, we insert an endogenous source of energy, namely a Kaldor-Verdoon increasing returns specification, that feeds the dynamics of the system over the long run and in that incorporates a transition to an (anti) dissipative framework. The qualitatively dynamics and ample array of topological structures reflect a wide range of Kaldorian stylised facts, as steady productivity growth and constant income distribution shares. The intensity of learning regimes and wage sensitivity to unemployment allow to mimic some typical traits of both Competitive and Fordist regimes of accumulation, showing the relevance of the demand-side engine, represented by the KV law, within an overall supply-side framework. High degrees of learning regimes stabilise the system and bring it out of an oscillatory trap. Even under regimes characterised by low degrees of learning, wage rigidity is able to stabilise the business cycle fluctuations and exert a positive effect on productivity growth.
Subjects: 
Capitalist system
Kaldor-Verdoon law
wage rigidity
dissipative complex systems
JEL: 
C61
C63
E11
E12
E32
E37
Document Type: 
Working Paper

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