2019/03/08 by Mauro Caminati, Serena Sordi
paper · doi:10.1111/meca.12243
crossref issued 2019/03/08 · crossref published 2019/03/08 · crossref published-online 2019/03/08 · crossref created 2019/03/08 · crossref published-print 2019/07/01 · crossref deposited 2023/09/10 · crossref indexed 2026/07/31
Abstract This paper contributes to the recent macro‐dynamics literature on demand‐led growth, drawing upon the seminal idea that the implications of Harrodian instability may be tamed by a source of autonomous expenditure in the economy. Contrary to the other contributions in this literature, real autonomous expenditure is not growing at an exogenously given rate, and partly consists of a flow of profit‐seeking R&D and innovation expenditures raising labour productivity through time. If the state of distribution, hence the wage share, is exogenously fixed and constant, the model gives rise to dynamics in a two dimensional state space, that may converge to, or give rise to a limit cycle around, an endogenous growth path. An exogenous rise of the profit share exerts negative effects on long‐run growth and employment, showing that growth is wage led.