We analyze the paradox of thrift in a two-sector Kaleckian growth model. We consider an economy with one consumption and one investment good, differential sectoral markups, and profit rates equalization. We show that when the investment function depends on aggregate capacity utilization and on...

We analyze the paradox of thrift in a two-sector Kaleckian growth model. We consider an economy with one consumption and one investment good, differential sectoral mark-ups, and profit rates equalization. We show that when the investment function depends on aggregate capacity utilization and on...

We adopt a standard search and matching model with endogenous job destruction to investigate two issues. First, we use a simplified version of Boeri and Burda (2009) to show that at sufficiently low levels of wage share, centralized wage bargaining performs better than decentralized bargaining...

We illustrate how the desire to live in a fair society that rewards individual effort and hard work triggers an unselfish though rational demand for redistribution. This leads the well off to prefer higher taxes and the poor to reject extreme progressivity. We then provide evidence of these...

Abstract The literature shows that when a society believes that wealth is determined by random “luck” rather than by merit, it demands more redistribution. Adverse shocks, like earthquakes, strengthen the belief that random “bad luck” can frustrate the outcomes achieved with merit. We...

In this paper, we look at structural change, and in particular at the shrinking size of manufacturing in favor of the service sector, as one additional source of decline in the wage share. To the purpose, we build on Dutt (1988) to develop a two-sector Kaleckian model of growth and distribution,...

Abstract A society that believes wealth to be determined by random “luck” rather than by merit, demands more redistribution. The theoretical literature shows that any increase in the volatility of income caused by unpredictable adverse shocks implies a higher support for redistribution. We...

In this paper, we look at structural change, and in particular at the shrinking size of manufacturing in favor of the service sector, as one additional source of decline in the wage share. To the purpose, we build on Dutt (1988) to develop a two-sector Kaleckian model of growth and distribution,...

We analyze the paradox of thrift in the two-sector Kaleckian growth model. We consider an economy with one consumption and one investment good, and differential sectoral mark-ups. We show that when the investment function depends on aggregate capacity utilization and on the aggregate profit...

This paper combines induced innovation and endogenous growth to investigate both the relation between the wage share and labor productivity growth and the long-run determinants of the wage share. We assume that myopic competitive firms choose the size and direction of technical change to...