2021/09 | LEM Working Paper Series | ||||||||||||||||
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An Agent-based Model for Secular Stagnation in the USA: Theory and Empirical Evidence |
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Andrea Borsato |
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Keywords | |||||||||||||||||
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Secular Stagnation; Innovation dynamics; Income distribution; Agent-based
SFC models; US manufacturing industries; Panel cointegration analysis.
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JEL Classifications | |||||||||||||||||
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E10, O31, O38, O43, P16
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Abstract | |||||||||||||||||
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The paper extends the research started with Borsato (2020). I develop an agent-based,
stock-flow consistent growth model to analyze the interplay between income distribution,
innovation and productivity growth. Results still show that the mounting shrinkage of the
labour share impacts negatively upon firm’s innovative effort. Additionally, I question the
neoclassical belief on the negative interest-elasticity of investments, since decreases in the
rate of interest are not associated with increases in capital accumulation. Finally, the panel
cointegration analysis based on US manufacturing industries corroborates the theoretical
predictions for the period 1958 − 2011.
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