Distribution and Steady‐State Growth Revisited

ABSTRACT Motivated by extensions to the neo‐Goodwinian framework pioneered by Lance Taylor, this paper investigates the two‐way interaction between growth and distribution. A particular focus is the effects of distribution on both the equilibrium and natural rates of growth, and the reconciliation of these growth rates in a steady‐state configuration. A model is developed in which medium‐run growth is profit‐led, but steady‐state growth is wage‐led. This result is shown to be robust to the introduction of different sources of technical change, and the demand‐ and supply‐side effects of human capacities accumulation.