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A short-period growth cycle model1

Published online by Cambridge University Press:  17 August 2016

Jörg Glombowski  and
Michael Krüger
Jörg Glombowski
Affiliation:
Tilburg University
Michael Krüger
Affiliation:
University of Massachusetts
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Summary

Goodwin's well-known growth cycle model has been rejected by Keynesians because it fails to take product disequilibria into account and gives rise to cycles which are much longer than observable business cycles. In the present article it is shown that cycles of much shorter duration can be obtained if the Goodwin model is modified by taking reactions to product market disequilibria into account. While shifts in income distribution between wages and profits remain the cycle maker, the modifications intensify the profit squeeze (and profit recovery) and thus speed up the cyclical process.

Résumé

Résumé

Les économistes keynesiens ont rejeté le modèle de croissance cyclique de Goodwin parce qu’il ne prenait pas en compte les déséquilibres sur le marché des produits et donnait naissance à des cycles d’une amplitude plus large que les cycles observables. Cet article montre que des cycles d’une amplitude plus courte peuvent être obtenus lorsqu’on modifìe le modèle de Goodwin en prenant en compte les réactions aux déséquilibres sur les marchés des produits. Les variations dans la répartition du revenu entre salaires et profits restent le moteur du cycle mais intensifient la décroissance (et la croissance) des profits et donc augmentent la rapidité du cycle.

Keywords

131131
Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 54 , Issue 4 , 1988 , pp. 423 - 438
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1988 

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Footnotes

1

Detailed criticism and constructive remarks by Robert M. Costrell, Peter Flaschel, Donald W. Katzner, Bruce Kelly, Aart de Zeeuw , and two referees of this journal are gratefully acknowledged.

References

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