PhD-Project: Essays on income distribution and demand-led growth

Franz Prante (Chemnitz University of Technology, IPE Berlin), PhD registered at Université Sorbonne Paris Nord
Supervisors: Eckhard Hein, Marc Lavoie

About

This dissertation explores the relationship between income distribution, demand-led growth, and macroeconomic regimes, set against the backdrop of the debate on wage-led versus profit- led demand and growth and the constrains posed by the contradictory but complementary effects of financialisation. Chapter 2 provides an examination of understudied non-linear distribution effects in linear Kaleckian distribution and growth models, which may be important for empirical studies and policy implications. The potential relevance of the effects is demonstrated in a counterfactual illustration for selected EU countries. The thesis then presents an overview of integrations of wage inequality within Kaleckian models. Following the review of these approaches, chapter 3 and 4 provide simple and illustrative Kaleckian macroeconomic models that are open to different relationships between personal income inequality, aggregate demand and growth, thereby adding further theoretical flexibility to the basic post-Kaleckian model and the notion of distribution-led regimes. Chapter 4 offers an empirical exploration of the macroeconomic impacts of personal and functional income distribution by estimating aggregate consumption functions for the US and Germany. In Chapter 5, a post-Keynesian stock-flow consistent model is deployed to illustrate the simultaneous emergence, as well as the complementarity and interdependence of the debt-led private demand boom regime and the export-led mercantilist regime that emerged during the financialisation period and which were at the heart of unsustainable processes that culminate into the Global Financial Crisis and the Great Recession. After linking to post-crises regime transitions, Chapter 6 concludes by applying a progressive policy solution within the model, advocating for a departure from the historically regressive trajectories of financialised capitalism.

Related publications

Demand and growth regimes in finance-dominated capitalism and a progressive equality-, sustainability- and domestic demand-led alternative - A post-Keynesian simulation approach, PSL Quarterly Review, 2023, 76(305), 181–202 (with A. Bramucci and E. Hein). Link

Varieties and interdependencies of demand and growth regimes in finance-dominated capitalism, Review of Keynesian Economics, 2022, 10(2), 264-290, 2022 (with A. Bramucci and E. Hein). Link to paper / Link to R code for replication of the stock-flow consistent model

Functional distribution and wage inequality in recent Kaleckian growth models, in: Bougrine, H., Rochon, L.-P. (eds.), Economic Growth and Macroeconomic Stabilization Policies in Post-Keynesian Economics, Essays in Honour of Marc Lavoie and Mario Seccareccia, Book Two, Cheltenham: Edward Elgar, 2020, 33-49 (with E. Hein). Link

Income distribution and the multiplier - an exploration of non-linear distribution effects in linear Kaleckian distribution and growth models, IPE Working Paper, No. 121/2019. Link

Macroeconomic effects of personal and functional income inequality: theory and empirical evidence for the US and Germany, Panoeconomicus, 2018, 65(3), pp. 289-318. Link

The German Financial System and the Financial and Economic Crisis, Financial and Monetary Policy Studies, 2017, Vol. 45, Springer (with D. Detzer, N. Dodig, T. Evans, E. Hein, H. Herr). Link