A simple model illustrates interactions between the 'primary' fiscal deficit (total deficit minus interest payments), economic growth and debt. The deficit/income ratio responds countercyclically to growth while growth may respond positively (a 'Keynes' case) or negatively (à la 'Merkel') to...

In this paper we analyse the interaction of macroeconomic activity and the dynamics of real wages from a theoretical perspective. By means of a system-dynamic approach we investigate the economic viability of wage- and profit-led demand regimes by analysing not only the effect of real wages on...