Work

Pseudo, or Not? Neo‐Goodwinian Growth Cycles With Financial Linkages

Year: 2026

Type: article

Abstract: ABSTRACT A profit‐led Goodwin mechanism generates the observed counterclockwise activity–labor share cycle. Introducing a financial linkage can reproduce this pattern even when demand is not profit‐led. This paper extends neo‐Goodwinian theory by incorporating the valuation ratio into a four‐dimensional model. We show that the model can generate a limit cycle and that the Goodwin pattern arises in simulations without profit‐led demand when financial interactions are present. Redistribution affects cyclical dynamics but has no steady‐state growth effects.

Source: Metroeconomica

DOI: 10.1111/meca.70015

Authors: Rudiger von Arnim, Luis Felipe Eick

Institution: University of Utah

Language: English

Topic: Economic Theory and Policy

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,350