You are looking at 1 - 9 of 9 items

  • Author or Editor: Robert A. Blecker x
Clear All Modify Search
You do not have access to this content

Robert A. Blecker and Arslan Razmi

You do not have access to this content

Robert A. Blecker

You do not have access to this content

Robert A. Blecker

You do not have access to this content

Distribution, Demand and Growth in Neo-Kaleckian Macro-Models

Challenging the Supply-side Vision of the Long Run

Robert A. Blecker

You do not have access to this content

Robert A. Blecker

The US economy has experienced a slowdown in its long-term growth and job creation that predates the Great Recession. The stagnation of output growth stems mainly from the depressing effects of rising inequality on aggregate demand, while both increased inequality and the delinkage of employment from output have their roots in profound structural changes to the US industrial structure and international position. Stagnation tendencies were temporarily offset by debt-financed household spending before the financial crisis, after which households became more financially constrained. Meanwhile, fiscal policy has shifted toward austerity while business investment has failed to keep up with the boom in corporate profits in spite of low interest rates. Slower US growth in turn exacerbates the global slowdown as it implies smaller injections of demand into global export markets.

This content is available to you

Robert A. Blecker

Several recent critiques have questioned the theoretical logic of standard models of balance-of-payments-constrained growth (BPCG) and the empirical support for ‘Thirlwall's law’. On the empirical side, critics charge that most econometric estimates of this model have effectively only tested whether exports and imports grow at similar rates in the long run. On the theoretical side, the criticisms have focused on the role of foreign income growth, capital accumulation, relative prices and country size in BPCG models. This article reviews the current state of the debate over these critiques and also offers a brief discussion and evaluation of three alternative models. The alternative models all highlight a significant role for the level of relative prices (or the real exchange rate) in determining long-run growth, which is consistent with recent empirical studies.

This content is available to you

Robert A. Blecker

Empirical studies have found mixed results regarding whether various countries have wage-led or profit-led demand regimes. Most of the previous literature has paid little attention to the time dimension of this distinction, but most of the studies that have found profit-led results have used methodologies that emphasize short-run cyclical relationships. This paper argues that demand is more likely to be profit-led in the short run and more likely to be wage-led in the longer term, because the positive effects of lower labor costs on investment and net exports are likely to be strongest in the short run, while the positive effects of a higher wage share on consumption are likely to be strongest in the longer term, at least in the US case (other countries may differ).