Disequilibrium Growth Theory: The Kaldor Model
NBER Working Paper No. 281
Disequilibrium macroeconomic theory [e.g. Clower, and Barroand Grossman] is extended to deal with capital accumulation in the long run. A growth model a la Kaldor is chosen for a frame-work. The real wage is supposed to be adjusted slowly, therefore there may be excess demand or supply in the labor market. The transaction takes place at the minimum of supply and demand. Since income shares of workers and capitalists depend on which regime the labor market is in, different equations are associated to different regimes. Local stability of the steady state by the disequilibrium dynamics is demonstrated.
Published: Ito, Takatoshi. "Disequilibrium Growth Theory." Journal of Economic Theory , Vol. 23, No. 3, (December 1980), pp. 380-409.