Modelling employment rate and wage dynamics in a closed economy: A predator-prey approach

Predation models have come close to modelling dynamic and complex economic factors despite its simplistic criticism. Based on Goodwin’s predator-prey framework, this study modelled the dynamics between employment rate and wage share of Ghana’s national output. Empirical data simulations revealed clear cyclical patterns in employment rates and wage shares, reflecting the dynamics in Goodwin’s class struggle theory. The employment rate and wage share exhibited a symbiotic relationship, where changes in one variable significantly influenced the other. The analysis further revealed that although both employment rate and wage share periodically declined, these variables were never annihilated indicative that the economy was resilient. Sensitivity analysis also demonstrated the robustness of the model, showing consistent patterns despite variations in initial conditions. After subjecting the model to stability test, the study showed that despite the economic fluctuations during the study period, the economy was generally stable mathematically, with a projected economic growth assured.