JOURNAL OF APPLIED BUSINESS AND ECONOMICS
Demand-Led Growth, Income Distribution and Debt
Author(s): Piero Ferri, Anna Maria Variato
Citation: Piero Ferri, Anna Maria Variato, (2020) "Demand-Led Growth, Income Distribution and Debt," Journal of Applied Business and Economics, Vol. 22, Iss.3, pp. 59-76
Article Type: Research paper
Publisher: North American Business Press
Abstract:
The paper presents a medium-run growth model led by aggregate demand and coherent with min-skian financial instability approach. The impact of wage share changes on growth and unemploy-ment is studied within a dynamic framework, characterized by a regime switching technique and a learning mechanism. The model makes two main contributions to the debate: it shows the impact on actual growth, as well as the steady state. Secondly, it illustrates how instability generated by wage changes in a “bad” regime can accelerate the entrance in a “good” regime improving the overall rate of growth without necessarily causing instability in the large.