Economic Crises and Policy Regimes
Show Less

Economic Crises and Policy Regimes

The Dynamics of Policy Innovation and Paradigmatic Change

Edited by Hideko Magara

In this innovative book, Hideko Magara brings together an expert team to explore both the possibilities and difficulties of transitioning from a neoliberal policy regime to an alternative regime through drastic policy innovations. The authors argue that, for more than two decades, citizens in developed countries have witnessed massive job losses, lowered wages, slow economic growth and widening inequality under a neoliberal policy regime that has placed heavy constraints on policy choices.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 5: Varieties of economic growth regimes, types of macroeconomic policies and policy regimes: a post-Keynesian analysis

Hiroshi Nishi


This chapter investigates the relationship between economic policy and macroeconomic performance. The purpose of the chapter is to contribute to current research on the policy regime from the viewpoint of post-Keynesian economics. The mechanisms of growth and business cycles have been revealed by post-Keynesian economics based on income distribution and finance. It has been almost fully shown that there are two types of growth and demand regimes, wage-led (stagnationist) and profit-led (exhilarationist). A wage-led growth regime (WLG) indicates an economy in which a rise in the profit share (a fall in the wage share) leads to a decrease in the rate of output growth, and a profit-led growth (PLG) regime indicates an economy in which a rise in the profit share leads to an increase in the rate of output growth. Representative theoretical analyses include Bhaduri and Marglin (1990), Blecker (2002) and Dutt (2012). Moreover, recent empirical studies include Stockhammer and Onaran (2004), Nishi (2011) and Storm and Naastepad (2012), which show that the income distribution- growth regime differs across countries and periods. Post-Keynesians have also examined macroeconomic performance in terms of the link between firm or government debt accumulation and economic growth. When increases in the debt-capital ratio and the interest rate lead to an increase in the rate of output growth, the economy is said to have a debt-led growth (DLG) regime.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.