Metroeconomica最新文献

Can cost-reducing technical change lead to a fall in the long run rate of profit if class struggle manages to keep the rate of exploitation constant? In this paper, we derive three results that, taken together, answer this question in the affirmative. First, we identify three properties that new real wage bundles must satisfy to keep the rate of exploitation constant and lead to a falling rate of profit. Second, we derive sufficient conditions for existence of an infinite number of such real wage bundles. Third, we show that, if the initial real wage bundle is such that the maximum price-labor value ratio is larger than 1 plus the rate of exploitation, then starting from any configuration of technology, there always exists a viable, capital-using labour-saving technical change that satisfies the sufficient conditions of the previous result. These results vindicate Marx's claim that if the rate of exploitation remains unchanged then technical change in capitalist economies can lead to a fall in the long run rate of profit.

This paper contributes to the post-Keynesian literature by building a macrodynamic Kaleckian model that incorporates recent evidence on market concentration and its relationship with capital accumulation and income distribution using Schumpeterian insights. This is done in two steps. First, we model a two-dimensional system that sets the dynamics between the wage share and the capital-effective labor supply ratio. Then, we extend the model, in the second step, to a three-dimensional system that incorporates the state-transition function of concentration. Our model suggests that higher market concentration may be associated with a permanent decline in employment, capacity utilization, wage share, and capital accumulation.

A vertically related market with vertical product differentiation is used to analyze the impact of vertical cross-ownership on industry profit, consumer surplus and social welfare. With forward cross-ownership, we find that when the upstream firm holds the share of the low-quality downstream firm, the industry profit is increasing (decreasing) in the cross-ownership if the product quality difference is large (small). When the upstream firm holds the share of the high-quality downstream firm, the industry profit is increasing in the cross-ownership. The cross-ownership will lead to a higher consumer surplus and social welfare no matter the type of vertical cross-ownership. We also consider the scenario that the upstream firm holds the share of both downstream firms.

In this paper we present a model of economic growth with endogenous technical progress. We test if the neoclassical growth model accepts the assumption that capital intensity affects Total Factor Productivity (TFP) in the long run. Our view takes inspiration from Kaldor's growth model of 1957 in which the Technical Progress Function (TPF) responds to the joint behavior of capital intensity and inventiveness. We find that “movements along a production function cannot be distinguished from shifts in this function” as formalized by the TPF. The model is tested using a Structural VAR for 17 advanced economies, over the period 1980–2020. On impact, when capital intensity improves, TFP increases sharply. This response is large and persistent over time and explains about half as much as of measured TFP. It confirms that capital intensity is an omitted variable in the traditional scheme used to estimate technical progress. Notably, the standard neoclassical growth model is not consistent with this evidence. Our analysis also shows that demand shocks can have permanent effects on output and unemployment. Finally, monetary policy helps to stabilize the business cycle, but loses its effectiveness in the long run.

This study examines the different types of technical change, as categorized by the productivity and cost criteria proposed by previous theoretical studies using data from the World Input–Output Database. The results confirm that in some sectors, the cost criteria are satisfied, but the productivity criteria are not. These technological changes are due to the very large labor input of imported intermediates and the higher monetary wage rate of the recipient country than that of the country supplying the imported intermediates. This study is a valid objection to previous theoretical studies.

We apply machine learning methods to the prediction of deterrence effects of tax audits. Based on tax declarations data, we predict the increase in future income declarations after being targeted by an audit. We find that flexible models, such as classification trees and ensemble methods based on them, outperform penalized linear models such as Lasso and ridge regression in predicting taxpayers more likely to increase their declarations after an audit. We show that despite the non-randomness of audits, their specific time structure and the distribution of changes in declared amounts suggest a causal interpretation of our results; that is, our approach detects a heterogeneity in the reaction to a tax audit, rather than just forecasting an unconditional future increase. We find that taxpayers identified by our model will on average increase their declared income by €14,461—the average among all audited taxpayers being €−205. Our approach allows the tax agency to yield significantly larger revenues by appropriately targeting tax audit.

In a stock-flow consistent neo-Kaleckian macro-model, along with worker households' debt dynamics, we incorporate distributional dynamics and examine the dynamic stability of the economy in the long-run. Both wage-led and profit-led but a debt-burdened demand and growth regimes are possible in the short-run and the long-run. We show that the interaction between the debt and distributional dynamics may lead to instability in the economy. We find that a rise in the targeted profit share of firms or an increase in the bargaining power of firms vis-à-vis workers may cause a deterioration in functional income distribution. We show that a fall in animal spirits leads to a decline in functional income distribution vis-à-vis workers and may also lead to a fall in capital accumulation rate in the long-run.

Modern Monetary Theory (MMT) has recently received significant attention in academic and policy circles. Critics question the sustainability of MMT-prescribed approaches to fiscal and monetary policy, especially over extended periods of time, in the presence of international financial markets, and for developing country governments that borrow in foreign currency. I formalize some of these arguments using a dynamic, open economy, Tobin-Markowitz portfolio balance environment that takes into account: (1) the role of expectations in the foreign exchange market and the feedback mechanisms between these and the exchange rate and inflation, and (2) interactions between the current account, debt accumulation, and the goods market. I show that continuous monetary accommodation of fiscal policy by a consolidated authority that operates along MMT-prescribed lines is likely to generate instability and make it hard to maintain full employment with stable inflation. Importantly, this is true even in the absence of rational forward-looking expectations or sovereign foreign indebtedness.

This paper contributes to the empirical literature on the Goodwin pattern. Building on the frequency domain representation of SVAR models, we calculate the extended partial directed coherence. This measure captures the contemporaneous effect from labor share onto economic activity. We illustrate the method with simulated data. Results for two-dimensional models with quarterly US data (1947Q1–2020Q1) between activity proxies (employment rate and output gap) and labor share indicate causal bi-directional relationships for short and medium run. We estimate an extended model in employment rate, output gap, and labor share, and sub-samples describing golden age and great moderation separately. Results indicate that the mechanisms underlying the Goodwin pattern have weakened in recent decades.

This paper provides evidence that external constraints determine growth slowdowns in middle-income countries. Econometric models corroborate a positive and significant relation between export margin and the growth of GDPpc for those countries that have remained between middle-income thresholds for at least 30 years, but not for others. While advanced economies have sustained their growth through permanent increases in productivity and the quality of products, many middle-income countries, most of them from Latin America, remain dependent on external prices for growth. Our results shed new light on old development challenges for developing countries.