2023-09-28 14:46:10 +00:00
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abstract: 'We study a two-class model of growth and the distribution of income and
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wealth at the intersection of contemporary work in classical political
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economy and post-Keynesian economics. The key insight is that aggregate
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demand is an externality for individual firms: this generates a
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strategic complementarity in production and results in equilibrium
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underutilization of the economy''s productive capacity, as well as
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hysteresis in real output. Underutilization also affects the functional
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distribution of income and the dis-tribution of wealth: both the wage
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share and the workers'' wealth share would be higher at full capacity.
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Consequently, fiscal allocation policy that achieves full utilization
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also attains a higher labor share and a more equitable distribution of
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wealth; while demand shocks have permanent level effects. Extensions
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look at hysteresis in the employment rate and growth. These findings are
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useful as an organizing frame-work for thinking through the lackluster
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economic record of the so-called Neoliberal era, the sluggish recovery
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of most advanced economies following the Great Recession, and the
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importance of fiscal policy in countering large shocks such as the
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Covid-19 pandemic.(c) 2022 Elsevier B.V. All rights reserved.'
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affiliation: 'Tavani, D (Corresponding Author), Colorado State Univ, Dept Econ, 1771
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Campus Delivery, Ft Collins, CO 80523 USA.
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Petach, Luke, Belmont Univ, Jack Massey Coll Business, Nashville, TN 37212 USA.
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Tavani, Daniele, Colorado State Univ, Dept Econ, 1771 Campus Delivery, Ft Collins,
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CO 80523 USA.'
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author: Petach, Luke and Tavani, Daniele
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author-email: 'Luke.Petach@Belmont.edu
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Daniele.Tavani@Colostate.edu'
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author_list:
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- family: Petach
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given: Luke
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- family: Tavani
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given: Daniele
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da: '2023-09-28'
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doi: 10.1016/j.strueco.2022.01.002
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earlyaccessdate: JAN 2022
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eissn: 1873-6017
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files: []
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issn: 0954-349X
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journal: STRUCTURAL CHANGE AND ECONOMIC DYNAMICS
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keywords: Externalities; Capacity utilization; Factor shares; Wealth inequality
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keywords-plus: CAPACITY UTILIZATION; UNITED-STATES; GROWTH; PASINETTI; MODEL
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language: English
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month: MAR
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number-of-cited-references: '53'
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orcid-numbers: Tavani, Daniele/0000-0002-2757-0439
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pages: 433-446
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papis_id: c517728771feeed837d7d5dba56de6a7
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ref: Petach2022aggregatedemand
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researcherid-numbers: Tavani, Daniele/HSE-9182-2023
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times-cited: '1'
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title: Aggregate demand externalities, income distribution, and wealth inequality
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000789745400029
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usage-count-last-180-days: '2'
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usage-count-since-2013: '6'
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volume: '60'
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web-of-science-categories: Economics
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year: '2022'
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