Department of Economics, University College London, UCL (University College London), Department of Economics, University College
Abstract
We show that there is a difficulty in the original Goodwin model which isalso found in some more recent applications. In it both the labour share and theproportion employed can exceed unity, properties which are untenable. However, weshow that the underlying dynamic structure of the model can be reformulated toensure that these variables cannot exceed unity. An illustrative example extends theoriginal model, and we argue it is both plausible and satisfies the necessary unit boxrestrictions. We show that there is a difficulty in the original Goodwin model which isalso found in some more recent applications. In it both the labour share and theproportion employed can exceed unity, properties which are untenable. However, weshow that the underlying dynamic structure of the model can be reformulated toensure that these variables cannot exceed unity. An illustrative example extends theoriginal model, and we argue it is both plausible and satisfies the necessary unit boxrestrictions
