Pervasive credit constraints have been seen as major sources of slow growth in developing economies. This paper clarifies a mechanism through which an inefficient financial system can reduce productivity growth. Using a two-sector model, second, we examine the implications for employment and the...

Post-Keynesian macroeconomics faces several challenges. The labor market and the supply side, Örst, have not been getting the attention that they deserve in post-Keynesian growth theory. The failings of the Lucastype ímicroeconomic foundationsí, second, must not lead to a neglect of...

Aggregate demand is important, both in the short and the long run, but a basic distinction must be made between dual and mature economies. Mature economies may suffer from a structural aggregate problem ("secu- lar stagnation"): full-employment growth may be impossible in the absence of...

This paper presents a model of inflation in developing economies and makes uses of it to evaluate macroeconomic policy in those countries. We see cross-sectoral interactions between demand and supply side forces as central and show that the standard macroeconomic policy recommendations of...

Developing economies with high levels of open or hidden unemployment face structural transformation problems. Unlike in mature economies there are no structural aggregate demand problems, and sustained aggregate demand stimulus can lead to a profit squeeze in the modern sector and...

Sraffian supermultiplier models (SSM) try to identify autonomous components of demand. The most plausible candidate is government consumption. Descriptively, however, government consumption does not grow at a constant rate, and prescriptively there is no justification for keeping constant the...

Phillips curves and natural rates of unemployment provide a poor foundation for analyzing inflation in developing economies. Structuralist alternatives have focused on distributional conflict and cross-sectoral interactions, but if the distributional claims are exogenous, the theory has formal...

Temporary workers make up a sizeable part of the labor force in many countries and typically receive wages that are significantly lower than their permanent counterparts. This paper uses an efficiency wage model to explain the wage gap between temporary and permanent workers. High-performing...

This note - written in response to von Arnim and Barrales (2015) - shows that (i) the Kaldor-Goodwin models in Skott (1989a, 1989b) and Skott and Zipperer (2012) provide good approximations to models with fast but finite adjustment of prices, (ii) the models can generate cyclical patterns that...

This note comments on the state of macroeconomics, arguing that the micro founded macro that developed after 1970s has been a wasteful detour. The paper will appear in a symposium in Homo Oeconomicus, vol. 27 (2), 2010, on the crisis and the response from the British Academy to the questions...