Kaleckiyen Model Çerçevesinde Talep ve Bölüşüm Dinamikleri: SVAR Modeli Yaklaşımı

Year 2023, Volume: 73 Issue: 1, 1 - 54, 26.06.2023

Betül Mutlugün , Ahmet İncekara

https://doi.org/10.26650/ISTJECON2022-1275817

Abstract

Project Number

Grant number SDK-2016-21801

Estimation of the Distribution and Demand Dynamics in Turkey: Structural Vector Autoregression Approach to a Post-Keynesian Model

Abstract

In this study, we present an empirical investigation into demand and distribution dynamics using structural vector autoregression analysis for Turkey between the period 1970-2017. The theoretical analysis is based on a Kaleckian dynamic macro model where distributive shares are determined endogenously by introducing Rowthorn’s conflicting claims on income by workers and firms and labor productivity is allowed to vary with the level of capacity utilization due to economies of scale due to Kaldor–Verdoorn effects and wage-push effects according to Marx. Our findings indicate that increases in wage share lead to an increase in accumulation and growth which suggests wage-led effective demand, while distributive dynamics demonstrate profit-squeeze results, at least in the short run. Moreover, the empirical model confirms most of the typical Kaleckian results.

Keywords

Income distribution, Kaleckian model, effective demand, structural vector autoregression model, Turkish economy

Supporting Institution

the Scientific Research Projects (BAP) unit of Istanbul University

Project Number

Grant number SDK-2016-21801

Thanks

This work was supported by the Scientific Research Projects (BAP) unit of Istanbul University, with grant number SDK-2016-21801 for the doctoral thesis of the author titled "A study on the relationship between distribution and growth in the framework of Post-Keynesian economics: The Case of Turkey". Earlier versions of the paper were presented at the 94th Annual Conference of Western Economic Association, San Francisco, California which held on June 28th-July 2nd, 2019, and the present version benefited from the session participants. All remaining errors are ours.

References

• Barbosa-Filho, N. H., & Taylor, L. (2006). Distributive and Demand Cycles in the Us Economy—A Structuralist Goodwin Model. Metroeconomica, 57(3), 389-41 1. https://doi. org/10.1111/j.1467-999X.2006.00250.x google scholar
• Barrales, J., & von Arnim, R. (2017). Longer-run distributive cycles: Wavelet decompositions for the US, 1948-2011. Review of Keynesian Economics, 5(2), 196-217. google scholar
• Baxter, M., & King, R. (1999). Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series. The Review of Economics and Statistics, 81(4), 575-593. google scholar
• Bhaduri, A. (2006). Endogenous economic growth: A new approach. Cambridge Journal of Economics, 30(1), 69-83. google scholar
• Bhaduri, A., & Marglin, S. (1990). Unemployment and the real wage: The economic basis for contesting political ideologies. Cambridge Journal of Economics, 14(4), 375-393. google scholar
• Blanchard, O. J., & Quah, D. (1989). The Dynamic Effects of Aggregate Demand and Supply Disturbances. American Economic Review, 79(4), 655-673. google scholar
• Blanchard, O., & Watson, M. (1986). Are Business Cycles All Alike? (pp. 123-180) [NBER Chapters]. National Bureau of Economic Research, Inc. https://econpapers.repec.org/bookchap/ nbrnberch/10021.htm google scholar
• Blecker, R. A. (1989). International competition, income distribution and economic growth. Cambridge Journal of Economics, 13(3), 395-412. google scholar
• Blecker, R. A. (1999). Kaleckian macro models for open economies. In Foundations of international economics: Post-Keynesian perspectives (pp. 116-150). Routledge. google scholar
• Blecker, R. A. (2002). Distribution, Demand and Growth in Neo-Kaleckian Macro-Models. In Chapters. Edward Elgar Publishing. https://ideas.repec.org/h/elg/eechap/1864_8.html google scholar
• Blecker, R. A. (2016). Wage-led versus profit-led demand regimes: The long and the short of it. Review of Keynesian Economics, 4(4), 373-390. https://doi.org/10.4337/roke.2016.04.02 google scholar
• Boratav, K., Türel, O., & Yeldan, E. (1996). Dilemmas of structural adjustment and environmental policies under instability: Post-1980 Turkey. World Development, 24(2), 373-393. https://doi. org/10.1016/0305-750X(95)00140-8 google scholar
• Bowles, S., & Boyer, R. (1995). Wages, aggregate demand, and employment in an open economy: An empirical investigation. In Macroeconomic Policy after the Conservative Era: Studies in Investment, Saving and Finance (Editor: G. A. Epstein, H. M Gintis, pp. 143-171). Cambridge University Press. google scholar
• Carvalho, L., & Rezai, A. (2016). Personal income inequality and aggregate demand. Cambridge Journal of Economics, 40(2), 491-505. https://doi.org/10.1093/cje/beu085 google scholar
• Cassetti, M. (2003). Bargaining power, effective demand and technical progress: A Kaleckian model of growth. Cambridge Journal of Economics, 27(3), 449-464. https://doi.org/10.1093/ cje/27.3.449 google scholar
• Celasun, M. (1994). DEVELOPMENT POLICY AND INDUSTRIALIZATION IN TURKEY. International Journal on World Peace, 11(2), 41-57. JSTOR. google scholar
• Cogley, T., & Nason, J. M. (1995). Effects of the Hodrick-Prescott filter on trend and difference stationary time series Implications for business cycle research. Journal of Economic Dynamics and Control, 19(1-2), 253-278. google scholar
• Cynamon, B. Z., & Fazzari, S. M. (2008). Household debt in the consumer age: Source of growth-risk of collapse. Capitalism and Society, 3(2), 1-32. https://doi.org/10.2202/1932-0213.1037 google scholar
• Cynamon, B. Z., & Fazzari, S. M. (2012). The end of the consumer age. In B. Z. Cynamon, M. Setterfield, & S. Fazzari (Eds.), After the great recession: The struggle for economic recovery and growth (pp. 129-157). Cambridge University Press. https://doi.org/10.1017/ CBO9781139059589.011 google scholar
• Diallo, M. B., Flaschel, P., Krolzig, H.-M., & Proano, C. R. (2011). Reconsidering the Dynamic Interaction between Real Wages and Macroeconomic Activity. Research in World Economy, 2(1), 77. https://doi.org/10.5430/rwe.v2n1p77 google scholar
• Duesenberry, J. S. (1949). Income, saving, and the theory of consumer behavior. Harvard University Press. google scholar
• Dutt, A. K. (1984). Stagnation, income distribution and monopoly power. Cambridge Journal of Economics, 8(1), 25-40. google scholar
• Dutt, A. K. (1987). Alternative closures again: A comment on “Growth, distribution and inflation.” Cambridge Journal of Economics, 11(1), 75-82. google scholar
• Dutt, A. K. (1990). Growth, Distribution and Uneven Development. CUP Archive. google scholar
• Dutt, A. K. (2005). Conspicuous consumption, consumer debt and economic growth. In M. Setterfield (Ed.), Interactions in analytical political economy: Theory, policy and applications (pp. 155-178). Routledge. https://doi.org/10.4324/9781315703398 google scholar
• Dutt, A. (2006). Aggregate Demand, Aggregate Supply and Economic Growth. International Review of Applied Economics, 20(3), 319-336. google scholar
• Ederer, S., & Stockhammer, E. (2007). Wages and Aggregate Demand: An Empirical Investigation for France [Chapters]. Edward Elgar Publishing. https://econpapers.repec.org/bookchap/ elgeechap/12580_5f6.htm google scholar
• Elder, J. & Kennedy, P. E. (2001). Testing for unit roots: What should students be taught?. The Journal of Economic Education, 32(2), 137-146. https://www.jstor.org/stable/1183489 google scholar
• Elliott, G., Rothenberg, T. J., & Stock, J. H. (1996). Efficient tests for an autoregressive unit root. Econometrica, 64(4), 813-836. https://www.jstor.org/stable/2171846 google scholar
• Ernst, E., Flaschel, P., Proano, C., & Semmler, W. (2006). Disequilibrium Macroeconomic Dynamics, Income Distribution and Wage-Price Phillips Curves (IMK Working Paper No. 04-2006). IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute. https://econpapers.repec.org/ paper/imkwpaper/04-2006.htm google scholar
• European Commission. (2019). Annual macro-economic database (AMECO) [Data set]. https:// dashboard.tech. ec.europa.eu/qs_digit_dashboard_mt/public/sense/app/667e9fba-eea7-4d17-abf0-ef20f6994336/sheet/2f9f3ab7-09e9-4665-92d1-de9ead91fac7/state/analysis google scholar
• Feenstra, R. C., Inklaar, R., & Timmer, M. P. (2015). The next generation of the Penn World Table. American Economic Review, 105(10), 3150-3182. https://doi.org/10.1257/aer.20130954 google scholar
• Fernandez, J. V. (2005). Income Distribution and Aggregate Demand in the U.S. Economy: An Empirical Investigation. American University. google scholar
• Flaschel, P., & Krolzig, H.-M. (2006). Wage-Price Phillips Curves and Macroeconomic Stability: Basic Structural Form, Estimation and Analysis. In C. Chiarella, R. Franke, P. Flaschel, & W. Semmler (Eds.), Contributions to Economic Analysis (Vol. 277, pp. 7-47). Elsevier. https://doi.org/10.1016/ S0573-8555(05)77002-4 google scholar
• Foley, D. K., & Michl, T. R. (1999). Growth and Distribution. Harvard University Press. google scholar
• Glyn, A. (2011). Functional Distribution and Inequality. The Oxford Handbook of Economic Inequality. https://doi.org/10.1093/oxfordhb/9780199606061.013.0005 google scholar
• Gollin, D. (2002). Getting Income Shares Right. Journal of Political Economy, 110(2), 458-474. https:// doi.org/10.1086/338747 google scholar
• Gordon, D. M. (1995). Growth, distribution, and the rules of the game: Social structuralist macro foundations for a democratic economic policy. In Macroeconomic Policy After the Conservative Era: Studies in Investment, Saving and Finance (pp. 335-383). Cambridge University Press. google scholar
• Hassler, J., Lundvik, P., Persson, T., & Soderlind, P. (1992). The Swedish business cycle: Stylized facts over 130 years (No. 63; Discussion Paper / Institute for Empirical Macroeconomics). Federal Reserve Bank of Minneapolis. https://ideas.repec.org/p/fip/fedmem/63.html google scholar
• Hein, E., & Ochsen, C. (2003). Regimes of Interest Rates, Income Shares, Savings and Investment: A Kaleckian Model and Empirical Estimations for some Advanced OECD Economies. Metroeconomica, 54(4), 404-433. google scholar
• Hein, E., & Tarassow, A. (2010). Distribution, aggregate demand and productivity growth: Theory and empirical results for six OECD countries based on a post-Kaleckian model. Cambridge Journal of Economics, 34(4), 727-754. google scholar
• Hein, E., & Vogel, L. (2008). Distribution and growth reconsidered: Empirical results for six OECD countries. Cambridge Journal of Economics, 32(3), 479-511. google scholar
• Hicks, J. (1932). The theory of wages. Macmillan. google scholar
• Jesus, C. S. de, Araujo, R. A., & Drumond, C. E. (2018). An empirical test of the Post-Keynesian growth model applied to functional income distribution and the growth regime in Brazil. International Reviewof AppliedEconomics, 32(4), 428-449. https://doi.org/10.1080/02692171.2017.1351528 google scholar
• Kaldor, N. (1961). Capital Accumulation and Economic Growth. In F. A. Lutz & D. C. Hague (Eds.), The Theory of Capital: Proceedings of a Conference held by the International Economic Association (pp. 177-222). Palgrave Macmillan UK. https://doi.org/10.1007/978-1-349-08452-4_10 google scholar
• Kaldor, N. (1966). Causes of the slow rate of economic growth of the United Kingdom: An inaugural lecture. Cambridge University Press. google scholar
• Kalecki, M. (1971). Selected Essays on the Dynamics of the Capitalist Economy 1933-1970. Cambridge University Press. google scholar
• Kiefer, D., & Rada, C. (2015). Profit maximising goes global: The race to the bottom. Cambridge Journal of Economics, 39(5), 1333-1350. google scholar
• Kim, Y. K., Setterfield, M., & Mei, Y. (2014). A theory of aggregate consumption. European Journal of Economics and Economic Policies: Intervention, 11(1), 31-49. https://doi.org/10.4337/ejeep.2014.01.03 google scholar Krueger, A. B. (1999). Measuring Labor’s Share. The American Economic Review, 89(2), 45-51. google scholar
• Lavoie, M. (1992). Foundations of Post-Keynesian Economic Analysis. Edward Elgar Publishing. https:// ideas.repec.org/b/elg/eebook/275.html google scholar
• Lavoie, M. (2017). The origins and evolution of the debate on wage-led and profit-led regimes. European Journal of Economics and Economic Policies: Intervention, 14(2), 200-221. google scholar
• Lee, J. & Strazicich, M. (2003). Minimum lagrange multiplier unit root test with two structural breaks. The Review of Economics and Statistics, 85(4), 1082-1089 google scholar
• Lima, G. T. (2004). Endogenous Technological Innovation, Capital Accumulation and Distributional Dynamics. Metroeconomica, 55(4), 386-408. https://doi.org/10.1111/j.1467-999X.2004.00199.x google scholar Marglin, S. A., & Bhaduri, A. (1990). The Golden Age of Capitalism: Reinterpreting the Postwar Experience. Clarendon Press. google scholar
• Marx, K. (1867). Capital-A Critique of Political Economy. Lawrence and Wishart. google scholar
• Metin-Ozcan, K., Voyvoda, E., & Yeldan, A. E. (2001). Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy: Growth, Accumulation and Distribution, Turkey 1969-1999. Canadian Journal of Development Studies / Revue Canadienne d'etudes Du Developpement, 22(1), 219-253. https://doi.org/10.1080/02255189.2001.9668808 google scholar
• Milanovic, B. (2019). Capitalism, Alone: The Future of the System That Rules the World. Harvard University Press. google scholar
• Naastepad, C. W. M. (2006a). Technology, demand and distribution: A cumulative growth model with an application to the Dutch productivity growth slowdown. Cambridge Journal of Economics, 30(3), 403-434. google scholar
• Naastepad, C. W. M. (2006b). Technology, demand and distribution: A cumulative growth model with an application to the Dutch productivity growth slowdown. Cambridge Journal of Economics, 30(3), 403-434. https://doi.org/10.1093/cje/bei063 google scholar
• Naastepad, C. W. M., & Storm, S. (2006). OECD Demand Regimes (1960-2000). Journal of Post Keynesian Economics, 29(2), 211-246. JSTOR. google scholar
• Organisation for Economic Co-operation and Development. (2014). Unit labour costs—Annual indicators [Data set]. https://stats.oecd.org/Index.aspx?DataSetCode=PDBI_I4 google scholar
• Organisation for Economic Co-operation and Development. (2017). Economic Outlook No 101- June 2017 [Data set]. https://stats.oecd.org/Index.aspx?DataSetCode=EO101_INTERNET google scholar
• Organisation for Economic Co-operation and Development. (2020). Productivity, Productivity Archives, Labor Productivity Growth [Data set]. https://stats.oecd.org/# google scholar
• Onaran, O., & Galanis, G. (2012). Is aggregate demand wage-led or profit-led? National and global effects (No. 994786233402676; ILO Working Papers). International Labour Organization. https://ideas.repec.org/p/ilo/ilowps/994786233402676.html google scholar
• Onaran, O., & Obst, T. (2016). Wage-led growth in the EU15 member-states: The effects of income distribution on growth, investment, trade balance and inflation. Cambridge Journal of Economics, 40(6), 1517-1551. https://doi.org/10.1093/cje/bew009 google scholar
• Onaran, O., & Stockhammer, E. (2005). Two Different Export-Oriented Growth Strategies: Accumulation and Distribution in Turkey and South Korea. Emerging Markets Finance and Trade, 41(1), 65-89. google scholar
• Palley, T. I. (1994). Debt, aggregate demand, and the business cycle: An analysis in the spirit of Kaldor and Minsky. Journal of Post Keynesian Economics, 16(3), 371-390. https://doi.org/10.1080 /01603477.1994.11489991 google scholar
• Palley, T. I. (2012). A neo-Kaleckian - Goodwin model of capitalist economic growth: Monopoly power,managerial pay, labor market conflict, and endogenous technical progress (No. 105-2012; IMK Working Paper). IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute. https://ideas.repec.org/p/imk/wpaper/105-2012.html google scholar
• Presidency of Strategy and Budget. (2020). Gross Fixed Investments (At Current Prices-By GNP) (19632006); Economic and Social Indicators, 1950-2014 [Data set]. Retrieved August 5, 2021, from http://www.sbb.gov.tr/ekonomik-ve- sosyal-gostergeler/#1540021349032-1be70108-294c google scholar
• Ravn, M., & Uhlig, H. (2002). On adjusting the Hodrick-Prescott filter for the frequency of observations. The Review of Economics and Statistics, 84(2), 371-375. google scholar Rowthorn, B. (1981). Demand, real wages and economic growth. Thames Polytechnic. google scholar
• Rowthorn, R. E. (1977). Conflict, Inflation and Money. Cambridge Journal of Economics, 1(3), 215-239. google scholar
• Sasaki, H. (2010). Endogenous technological change, income distribution, and unemployment with inter-class conflict. Structural Change and Economic Dynamics, 21(2), 123-134. google scholar
• Sasaki, H. (2011). Conflict, growth, distribution, and employment: A long-run Kaleckian model. International Review of Applied Economics, 25(5), 539-557. https://doi.org/10.1080/02692171.2 011.557057 google scholar
• Sasaki, H., Sonoda, R., & Fujita, S. (2013). International Competition and Distributive Class Conflict in an Open Economy Kaleckian Model. Metroeconomica, 64(4), 683-715. https://doi.org/10.1111/ meca.12030 google scholar
• Shaikh, A., & Moudud, J. K. (2004). Measuring Capacity Utilization in OECD Countries: A Cointegration Method [Economics Working Paper Archive]. Levy Economics Institute. https://econpapers. repec.org/paper/levwrkpap/wp_5f415.htm google scholar
• Shapiro, M., & Watson, M. (1988). Sources of Business Cycles Fluctuations (pp. 111-156) [NBER Chapters]. National Bureau of Economic Research, Inc. https://econpapers.repec.org/bookchap/ nbrnberch/10953.htm google scholar
• Sims, C. A. (1980). Macroeconomics and Reality. Econometrica, 48(1), 1-48. JSTOR. https://doi. org/10.2307/1912017 google scholar
• Sims, C. A. (1986). Are forecasting models usable for policy analysis? Quarterly Review, Win, 2-16. google scholar
• Sims, C., Stock, J., & Watson, M. (1990). Inference in Linear Time Series Models with Some Unit Roots. Econometrica, 58(1), 113-144. google scholar
• Skott, P. (2016). Weaknesses of “wage-led growth” (No. 2016-08; UMASS Amherst Economics Working Papers). University of Massachusetts Amherst, Department of Economics. https://ideas. repec.org/p/ums/papers/2016-08.html google scholar
• Steindl, J. (1952). Maturity and Stagnation in American Capitalism. NYU Press. google scholar
• Stockhammer, E. (2015). Wage-led versus profit-led demand: What have we learned? A Kalecki-Minsky view (No. PKWP1512; Working Papers). Post Keynesian Economics Society (PKES). https://ideas.repec.org/p/pke/wpaper/pkwp1512.html google scholar
• Stockhammer, E., Hein, E., & Grafl, L. (2011). Globalization and the effects of changes in functional income distribution on aggregate demand in Germany. International Review of Applied Economics, 25(1), 1-23. https://doi.org/10.1080/02692170903426096 google scholar
• Stockhammer, E., & Onaran, O. (2004). Accumulation, distribution and employment: A structural VAR approach to a Kaleckian macro model. Structural Change and Economic Dynamics, 15(4), 421-447. google scholar
• Stockhammer, E., & Wildauer, R. (2016). Debt-driven growth? Wealth, distribution and demand in OECD countries. Cambridge Journal of Economics, 40(6), 1609-1634. https://doi.org/10.1093/ cje/bev070 google scholar
• Storm, S., & Naastepad, C. W. M. (2009). Labor Market Regulation and Productivity Growth: Evidence for Twenty OECD Countries (1984-2004). Industrial Relations: A Journal of Economy and Society, 48(4), 629-654. https://doi.org/10.1111/j.1468-232X.2009.00579.x google scholar
• Tavani, D., Flaschel, P., & Taylor, L. (2011). Estimated non-linearities and multiple equilibria in a model of distributive-demand cycles. International Review of Applied Economics, 25(5), 519538. google scholar Taylor, L. (1991). Income distribution, inflation and growth: Lectures on structuralist macroeconomic theory : Lance Taylor, (The MIT Press, Cambridge MA, 1991) pp. 290. Journal of Development Economics, 45(1), 172-174. google scholar
• Taylor, L. (2004). Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream. Harvard University Press. google scholar
• Taylor, L. (2011). Growth cycles, asset prices, and finance (Working Paper No. 1101). New School for Social Research, Department of Economics. https://econpapers.repec.org/paper/ newwpaper/1101.htm google scholar
• Turkish Statistical Institute. (2020). Annual Gross Domestic Product by Income Approach [Data set]. https://data.tuik.gov.tr/Kategori/GetKategori?p=ulusal-hesaplar-113&dil=2 google scholar Verdoorn, P. J. (1949). On the factors determining the growth of labor productivity. Italian Economic Papers, 2, 59-68. google scholar
• World Bank. (2018). World Development Indicators [Data set]. Retrieved May 12, 2018, from https://databank.worldbank.org/source/world-development- indicators google scholar Yeldan, E. (2000). The Impact of Financial Liberalization and the Rise of Financial Rents on Income Inequality: The Case of Turkey [Research Paper]. World Institute for Development Economics Research. https://econpapers.repec.org/paper/fthwodeec/206.htm google scholar
• Yeldan, E. (2005). Assessing the Privatization Experience in Turkey: Implementation, Politics and Performance Results. [Research Paper]. Mimeo, Economic Policy Institute, Washington DC. http:// yeldane.bilkent.edu.tr/EPI_Report2005_Yeldan.pdf google scholar