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A Neoclassical Kaldor Model of Real Wage Declines
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IZA Seminar |
Place: Schaumburg-Lippe-Str. 9, 53113 Bonn |
Date: 13.07.2004, 12:00 - 13:30 |
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Abstract: |
A model linking macroeconomic equilibrium and income distribution
in balanced growth equilibria is developed as a variant to the
Kaldor model of factor shares. It departs from the original Kaldor
model in assuming equal saving rates and a neoclassical production
function. Macroeconomic equilibrium (national savings equal to investment)
combines with competitive microeconomic behavior to determine
the real wage and real interest rate. An increase in the ratio
of national debt to labour reduces the real wage, explaining recent
declines. |
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Download complete paper  |
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For more information, please contact seminar@iza.org
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