FUNCTIONAL DISTRIBUTION, CAPITAL ACCUMULATION AND GROWTH IN A NON-LINEAR MACRODYNAMIC MODEL
Gilberto Tadeu Lima
It is developed a macrodynamic model of distribution, capital accumulation and growth in which investment is non-linear in distribution: at low (high) levels of wage share, the impact of a higher profit share on investment is negative (positive). This specification conforms with some of the empirical evidence for the rise and fall of the Golden Age in several advanced economies. As it turns out, whether the economy follows a wage-led growth regime or a profit-led one depends on the prevailing distribution. Indeed, a similar dependence applies, alongside with the relative bargaining power of capitalists and workers and the cyclical behavior of markups, to the dynamic stability properties of the economy.
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