Fiscal Regimes and Wage Formation: Learning Distributive Conflict in a Kaleckian Economy

Fiscal Regimes and Wage Formation: Learning Distributive Conflict in a Kaleckian Economy | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Fiscal Regimes and Wage Formation: Learning Distributive Conflict in a Kaleckian Economy houssam boughabi This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-9611899/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract This paper develops a Kaleckian model of wage dynamics in which wages are determined by forward-looking expectations, firms’ profitability, and institutional conditions shaped by fiscal policy. The model introduces nonlinear and regime-dependent effects through an institutional function that mediates the transmission of expectations and profits into wage outcomes. To empirically assess these mechanisms, we estimate a flexible reduced-form specification using machine learning methods, allowing for complex interactions and threshold effects that are not captured by standard linear approaches. The results provide evidence that institutional and fiscal regimes play a key role in shaping wage responses, supporting the view that income distribution is driven by distributive conflict and policy structures rather than market-clearing forces. These findings contribute to the post-Keynesian literature by offering a novel empirical framework for analyzing wage formation and highlight the importance of fiscal policy in influencing inequality and macroeconomic stability. JEL Classification. E12, E24, E60, C45, C53. Macroeconomics Wage dynamics distributive conflict post-Keynesian economics machine learning econometrics fiscal institutions Full Text Additional Declarations The authors declare no competing interests. Supplementary Files ModelPythonCode.docx Model Python Code Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-9611899","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":634377008,"identity":"8e2ef4a4-81d9-458c-b186-b4a629ca311a","order_by":0,"name":"houssam boughabi","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA5UlEQVRIiWNgGAWjYBACAyjNw9jMkPgAxOAjVosMc3vDYxCHh41YLTbsPQefSYBYBLWYs/cYf/xRs42Hd0ZyWuXXHDsZNgbmh49u4NFi2XPGTJrn2G0eyRlpabdltyUDHcZmbJyDz2E3csyYGdhu8xjOyEm7LbmNGaiFh02agBagw/7d5rG/kf+tWHJbPVFaDCR4227zMPYcSGP8uO0wEVrOHCuT5u0DamlvSJZm3Hach42ZkF+ON2/++OPbbXtQVH78ua3anp+9+eFjfFpQADMPmCRWOQgw/iBF9SgYBaNgFIwYAABAzEjADqqz6AAAAABJRU5ErkJggg==","orcid":"https://orcid.org/0009-0005-3492-1910","institution":"National Institute of Statistics and Applied Economics","correspondingAuthor":true,"prefix":"","firstName":"houssam","middleName":"","lastName":"boughabi","suffix":""}],"badges":[],"createdAt":"2026-05-04 20:26:15","currentVersionCode":1,"declarations":{"humanSubjects":false,"vertebrateSubjects":false,"conflictsOfInterestStatement":false,"humanSubjectEthicalGuidelines":false,"humanSubjectConsent":false,"humanSubjectClinicalTrial":false,"humanSubjectCaseReport":false,"vertebrateSubjectEthicalGuidelines":false},"doi":"10.21203/rs.3.rs-9611899/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-9611899/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":108569792,"identity":"e63cc581-8d19-45aa-9022-5c8b27792bb4","added_by":"auto","created_at":"2026-05-06 05:56:11","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":220001,"visible":true,"origin":"","legend":"","description":"","filename":"Article10.pdf","url":"https://assets-eu.researchsquare.com/files/rs-9611899/v1_covered_4a3ff127-9b9f-4be5-bb8f-1ef40db86be2.pdf"},{"id":108569740,"identity":"24b131fb-7b23-466b-9dd1-86b698d9d456","added_by":"auto","created_at":"2026-05-06 05:55:52","extension":"docx","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":15819,"visible":true,"origin":"","legend":"\u003cp\u003eModel Python Code\u003c/p\u003e","description":"","filename":"ModelPythonCode.docx","url":"https://assets-eu.researchsquare.com/files/rs-9611899/v1/cb906c31fcc1d67348a5f5c7.docx"}],"financialInterests":"The authors declare no competing interests.","formattedTitle":"\u003cp\u003eFiscal Regimes and Wage Formation: Learning Distributive Conflict in a Kaleckian Economy\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"Institut National de Statistique et d'Economie Appliquée","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Wage dynamics, distributive conflict, post-Keynesian economics, machine learning econometrics, fiscal institutions","lastPublishedDoi":"10.21203/rs.3.rs-9611899/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-9611899/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis paper develops a Kaleckian model of wage dynamics in which wages are determined by forward-looking expectations, firms’ profitability, and institutional conditions shaped by fiscal policy. 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