A neo-Kaleckian - Goodwin model of capitalist economic growth: Monopoly power,managerial pay, labor market conflict, and endogenous technical progress

This paper presents a neo-Kaleckian - Goodwin model of growth and distribution. The key innovation is the introduction of managerial pay. Kaleckian monopoly power determines the functional distribution of income and Goodwin labor bargaining power determines wage bill division. The model helps explain slower U.S. growth over the past thirty years. For much of that period the functional distribution of income was relatively constant, but growth slowed because income inequality increased owing to wage bill shift from workers to managers. The wage bill division effect explains why economies can display wage-led and profit-led characteristics. Economies can be profit-led regarding functional income distribution and wage-led regarding wage bill distribution.