Abstract
ABSTRACTThis paper presents a neo‐Kaleckian growth model with unemployment, endogenous technical progress, and a steady‐state requirement of balanced labor demand and supply growth. There are two key innovations: first, a Marx–Hicks unemployment rate–profit rate channel affecting labor‐saving technical progress; second, a Keynesian unemployment rate channel affecting saving and investment. Changes in the unemployment rate change the profit rate, rebalancing effective labor supply and employment growth. This provides a Hicksian resolution of Harrod's knife‐edge. The Keynesian unemployment rate channel strengthens the growth benefits of a lower unemployment rate, potentially obviating any growth–unemployment trade‐off.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
