Testing Goodwin’s Growth Cycle Disaggregated Models: Evidence from the Input-Output Table of the Greek Economy for the Year 1988

Rodousakis, Nikolaos (2010): Testing Goodwin’s Growth Cycle Disaggregated Models: Evidence from the Input-Output Table of the Greek Economy for the Year 1988.

Abstract

This paper tests empirically the well-known Goodwin’s ‘growth cycle’ disaggregated models, using data from the symmetric input-output table of the Greek economy for the year 1988. It is found that from qualitative as well as quantitative point of view, both models are not adequate to describe the long-run workers’ share-employment rate trajectories of the Greek economy. However, in the medium-run analysis the evidence presented here are more encouraging: at qualitative level, one of the two Goodwin’s models is found to be adequate to describe the dynamic behavior of the workers’ share and employment rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: Business cycles; Disaggregated models; Input-output tables; Principal coordinates
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D57 - Input-Output Tables and Analysis; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C67 - Input-Output Models

References

[1] A. B. Atkinson, The timescale of economic models: how long is the long run?, The Review of Economic Studies 36 (1969) 137-152.

[2] M. Desai, Econometric models of the share of wages in national income, U.K. 1855-1965, in: R. Goodwin, M. Krüger, A. Vercelli (Eds.), Nonlinear Models of Fluctuating Growth, Springer, Berlin, 1984, pp. 253-277.

[3] P. Flaschel , G. Groh, The classical growth cycle: reformulation, simulation and some facts, Economic Notes 24 (1995) 293-326.

[4] P. Flaschel , G. Groh, G. Kauermann, T. Teuber, The classical growth cycle after fifteen years of new observations, in: P. Flaschel and M. Landesmann (Eds.), Mathematical Economics and the Dynamics of Capitalism, Routledge, London, 2009, pp. 69-77.

[5] R.M. Goodwin, A growth cycle, in: C.H. Feinstein (Ed.), Socialism, Capitalism and Economic Growth: Essays Presented to Maurice Dobb, Cambridge University Press, London, 1967, pp. 54-58.

[6] R.M. Goodwin, Use of normalized general coordinates in linear value and distribution theory, in: K.R. Polenske and J.V. Skolka (Eds), Advances in Input-Output Analysis, Proceedings of the Sixth International Conference on Input-Output Techniques, Ballinger, Cambridge, 1976, pp. 581-602.

[7] R.M. Goodwin, A note on wages, profits and fluctuating growth rates, Cambridge Journal of Economics 7 (1983) 305-9.

[8] R.M. Goodwin, Essays in Linear Economic Structures, Macmillan, London, 1983.

[9] R.M. Goodwin, Disaggregated models of fluctuating rowth, in: R.M. Goodwin, M. Krügerm, A. Vercelli (Eds.), Nonlinear models of fluctuating growth, Springer, Berlin, 1984, pp. 67-72.

[10] R.M. Goodwin, Swinging along the turnpike with von Neumann and Sraffa, Cambridge Journal of Economics 10 (1986) 211-24.

[11] R.M. Goodwin, Swinging along the Autostrada: Cyclical Fluctuations along the von Neumann ray, in: M. Dore, S. Chakravarty, R. Goodwin (Eds), John von Neumann and Moderns Economics, Clarendon Press, Oxford, 1989, pp. 125-140.

[12] R. M. Goodwin, L. F. Punzo, The Dynamics of a Capitalist Economy. A Multi-Sectoral Appoach, Polity Press, Cambridge, 1987.

[13] D. Harvie, Testing Goodwin: growth cycles in ten OECD countries, Cambridge Journal of Economics 24 (2000) 349-376.

[14] H.D. Kurz, N, Salvadori, Theory of Production. A Long - Period Analysis, Cambridge University Press, Cambridge, 1995.

[15] T. Mariolis, N., Rodousakis, L. Tsoulfidis, The rate of profit in the greek economy 1988-1997. An input-output analysis, Archives of Economic History 2 (2006) 177-190.

[16] C. Nikiforos, Employment profitability cycles in the economy of the United States: an empirical point of view, Political Economy 6 (2000) 137-160.

[17] OECD Department of Economics and Statistics publications 1982, 1992, 1996, 2009, National Accounts, Paris, OECD.

[18] OECD Department of Economics and Statistics, 1968, 1975, 1994, 2009, Labour Force Statistics Paris, OECD.

[19] N. Rodousakis, The Profit-Wage Rate in the Greek Economy 1988-1997. An Input-Output Analysis (in Greek), mimeo, 2006.

[20] N. Rodousakis, Goodwin’s Lotka-Volterra model in disaggregative form: a note, available at http://mpra.ub.uni-muenchen.de/22975/, 2010.

[21] R. Solow, Goodwin’s growth cycle, in: K. Velupillai (Ed.), Nonlinear and Multisectoral Macrodynamics, Macmillan, London, 1990.

[22] L. Tsoulfidis, T. Mariolis, Labour values, prices of production and the effects of income distribution: evidence from the Greek economy, Economic Systems Research 19 (2007) 425-437.