2023/21 | LEM Working Paper Series | ||||||||||||||||
![]() |
|||||||||||||||||
Increasing returns and labour markets in a predator-prey model |
|||||||||||||||||
Giovanni Dosi, Davide Usula and Maria Enrica Virgillito |
|||||||||||||||||
Keywords | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
Capitalist system; Kaldor-Verdoon law; wage rigidity; dissipative complex systems.
|
|||||||||||||||||
JEL Classifications | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
C61, C63, E11, E12, E32, E37
|
|||||||||||||||||
Abstract | |||||||||||||||||
![]() |
![]() |
||||||||||||||||
The purpose of this work is to study the joint interaction of three
founding elements of modern capitalism, namely endogenous
technical change, income distribution and labour markets, within a
low-dimensional nonlinear dynamic setup extending the Goodwin model.
By going beyond the conservative structure typical of the predator-prey
model, we insert an endogenous source of energy, namely a Kaldor-Verdoon
increasing returns specification, that feeds the dynamics of
the system over the long run and in that incorporates a transition to an
(anti) dissipative framework. The qualitatively dynamics and ample
array of topological structures reflect a wide range of Kaldorian stylised
facts, as steady productivity growth and constant income distribution
shares. The intensity of learning regimes and wage sensitivity to
unemployment allow to mimic some typical traits of both Competitive and
Fordist regimes of accumulation, showing the relevance of the
demand-side engine, represented by the KV law, within an overall supply-side
framework. High degrees of learning regimes stabilise the system and
bring it out of an oscillatory trap. Even under regimes characterised by
low degrees of learning, wage rigidity is able to stabilise the business
cycle fluctuations and exert a positive effect on productivity growth.
|
Downloads
|
![]() ![]() |
|
![]()
|
![]() |