Globalization as Coordination Failure
WORKING PAPER
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This paper presents an(other) investigation of the links between growth and distribution.
We discuss a Neo–Kaleckian two country model with fixed mark–ups, where repercussions between the two countries matter. We assume that demand is wage–led in autarky but profit–led with trade, and study the effect of home country redistribution toward labor on aggregate demand in both countries. We derive closed form results for two identical countries, and run simulations to consider different economic structures and behavioral parameters.