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 Research Projects at the MPIfG

Introduction to "Political Economy of Growth Models"

Lucio Baccaro


 
The growth model perspective aims to account both for commonality and for diversity in contemporary capitalism. Rather than focusing on institutional sets underpinning different production regimes (varieties of capitalism), the growth model perspective shifts the focus onto the demand drivers of growth. Growing inequality (implying larger income flows accruing to social groups with a higher propensity to save) and a greater orientation towards shareholder value (implying lower investment for given profits) determine a chronic excess of savings relative to investments and result in a generalized tendency towards stagnation. Simultaneously, the main sources of demand growth differ across advanced countries. Following the generalized decline of wage-led (or fordist) growth – a model in which economic growth is pushed by real wages financing household consumption – some countries maintain a domestic demand focus (although greater access to household debt and wealth effect play a more important role than in the past), while other countries rely predominantly on export-led growth. Still other countries manage to balance out domestic and foreign drivers of demand, while in some cases, no driver is sufficient and the country stagnates. Current research projects cover both the political economy and the politics of growth models. Examples include applying or extending the growth model perspective to specific countries, analyzing social coalitions underpinning growth models, studying individual preferences for growth models and macroeconomic policies more generally, understanding the effects of hegemonic economic discourses, investigating the impact of growth models on political economic outcomes, and identifying growth models empirically.
 

 
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