Welfare models and demand-led growth regimes before and after the financial and economic crisis

Abstract

Recently, several interesting attempts have been made at connecting comparative political economy (CPE) approaches, as the Varieties of Capitalism (VoC) theory, with post-Keynesian (PK) research on different demand-led growth regimes in modern capitalism, and for the period of finance-dominated capitalism since the early 1980s in particular. However, we find several problems in the way Kaleckian and PK approaches are interpreted and integrated in modern CPE approaches. Therefore, we first clarify several ambiguities and misunderstandings of PK demand-led growth regimes and their empirical indicators in the recent CPE literature, and, following the recent PK literature, we provide a theoretically consistent and empirically applicable classification of demand and growth regimes under the conditions of finance-dominate capitalism. Second, instead of using the traditional VoC dual classification, we link and confront the PK demand and growth regimes with the recent evolution of Esping-Andersen's (1990) taxonomy which considers five welfare models. Third, we examine the relationships between demand-led growth regimes and welfare models, both before and after the 2007-9 global crisis. For this purpose, we share the qualitative taxonomy suggested by Hay and Wincott (2012), and additionally we quantitatively assess the degree of welfare of each country and its evolution by means of a 'principal component analysis' (PCA), which allows us to synthesize four socioeconomic indicators in a multidimensional measure of welfare.

Post-Keynesian Macroeconomic Foundations for Comparative Political Economy

“…Demand regimes describe the effects of a change in income distribution on demand (and its components: consumption, investment, and net exports). 76 If an increase in the wage share leads to an increase in demand, the regime is called wage-led. The definition of this regime is independent of the actual change in the wage share.…”

Fundamentos institucionales del crecimiento dirigido por la demanda: una nueva agenda de investigación

“…A la hora de identificar los MC se han seguido varias estrategias. Mientras que ByP optan por analizar las tasas de crecimiento de los componentes de la demanda agregada y se centran en el trade-off entre consumo y exportaciones netas, Hein et al (2020) prefieren analizar las contribuciones al crecimiento económico y Behringer y van Treeck (2019) los saldos sectoriales de la economía.…”

“…Desde entonces, autores provenientes de ambas corrientes han participado en esta agenda, arrojando importantes contribuciones (ej. Baccaro y Benassi, 2017;Baccaro y Howell, 2017;Hall, 2017;Behringer y van Treeck, 2019;Hein et al, 2020;Kohler y Stockhammer, 2020).…”

Digitalization or flexibilization? The changing role of technology in the political economy of Japan

“…The paper explores these questions through a detailed consideration of the process of digitalization as it has occurred in the case of Japan. In doing so, it seeks to contribute to the ongoing study of comparative capitalisms, which has gained in prominence in the field of IPE in recent years (Hay, 2020;Hein et al, 2020). This represents a focus on the different socio-economic and institutional configurations that constitute the national models of capitalism that exist within an overall global economy and which are studied in order to understand how those national configurations mediate the effect of broader socio-economic trends (Hay, 2020).…”