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A clarification of the Goodwin model of the growth cycle

Desai, M; Henry, B; Mosley, A; Pemberton, M; (2004) A clarification of the Goodwin model of the growth cycle. (Discussion Papers in Economics 04-04 ). Department of Economics, University College London, UCL (University College London), Department of Economics, University College: London, UK. Green open access

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Abstract

We show that there is a difficulty in the original Goodwin model which isalso found in some more recent applications. In it both the labour share and theproportion employed can exceed unity, properties which are untenable. However, weshow that the underlying dynamic structure of the model can be reformulated toensure that these variables cannot exceed unity. An illustrative example extends theoriginal model, and we argue it is both plausible and satisfies the necessary unit boxrestrictions. We show that there is a difficulty in the original Goodwin model which isalso found in some more recent applications. In it both the labour share and theproportion employed can exceed unity, properties which are untenable. However, weshow that the underlying dynamic structure of the model can be reformulated toensure that these variables cannot exceed unity. An illustrative example extends theoriginal model, and we argue it is both plausible and satisfies the necessary unit boxrestrictions.

Type: Report
Title: A clarification of the Goodwin model of the growth cycle
Open access status: An open access version is available from UCL Discovery
Additional information: Imported via OAI, 20:31:45 23rd Feb 2007
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/2575
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