Distributive Conflict, Investment, and Persistent Unemployment: Evidence from a Kaleckian Long-Memory Model — The Case of Germany (1990–2024)

Distributive Conflict, Investment, and Persistent Unemployment: Evidence from a Kaleckian Long-Memory Model — The Case of Germany (1990–2024) | 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 Distributive Conflict, Investment, and Persistent Unemployment: Evidence from a Kaleckian Long-Memory Model — The Case of Germany (1990–2024) houssam boughabi This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8503316/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 investigates the interplay between distributive conflict, investment dynamics, and persistent unemployment within a Kaleckian framework, emphasizing the long-memory properties of wages. We develop a stochastic model in which wages adjust adaptively to historical discrepancies between prices and wages, while investment is driven by expected profitability rather than market clearing. Applying this model to Germany over the period 1990–2024, we provide evidence that cumulative divergences between prices and wages generate persistent effects on real wages, aggregate demand, and employment. Our findings highlight that long-memory wage dynamics amplify the unemployment consequences of investment-driven accumulation, demonstrating a structural mechanism through which distributive conflict and inflation interact. The results underscore the importance of historical wage inertia and profit-led investment in shaping macroeconomic outcomes, offering new insights into the sources of persistent unemployment in advanced economies. Macroeconomics Kaleckian economics wage–price dynamics long-memory distributive conflict persistent unemployment Full Text Additional Declarations The authors declare no competing interests. Supplementary Files ModelPythonCode.docx Modelling 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-8503316","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":568585498,"identity":"28e99056-eb24-48e4-ac26-3e6839a98ee6","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":"2026-01-02 21:14:58","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-8503316/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8503316/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":99796702,"identity":"779005ea-d6f9-4cf6-9043-55ea9f343d4f","added_by":"auto","created_at":"2026-01-08 13:43:12","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":341503,"visible":true,"origin":"","legend":"","description":"","filename":"Article6.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8503316/v1_covered_705e76bb-18f5-4632-931a-b727c7beda78.pdf"},{"id":99665031,"identity":"ea2b581a-122d-45b0-9ae7-9e67994cb10b","added_by":"auto","created_at":"2026-01-07 05:13:50","extension":"docx","order_by":1,"title":"","display":"","copyAsset":false,"role":"supplement","size":15100,"visible":true,"origin":"","legend":"\u003cp\u003eModelling Python Code\u003c/p\u003e","description":"","filename":"ModelPythonCode.docx","url":"https://assets-eu.researchsquare.com/files/rs-8503316/v1/9f354176419f6ca4213b755d.docx"}],"financialInterests":"The authors declare no competing interests.","formattedTitle":"\u003cp\u003eDistributive Conflict, Investment, and Persistent Unemployment: Evidence from a Kaleckian Long-Memory Model — The Case of Germany (1990–2024)\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"National Institute of Statistics and Applied Economics","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":"Kaleckian economics, wage–price dynamics, long-memory, distributive conflict, persistent unemployment","lastPublishedDoi":"10.21203/rs.3.rs-8503316/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8503316/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThis paper investigates the interplay between distributive conflict, investment dynamics, and persistent unemployment within a Kaleckian framework, emphasizing the long-memory properties of wages. We develop a stochastic model in which wages adjust adaptively to historical discrepancies between prices and wages, while investment is driven by expected profitability rather than market clearing. Applying this model to Germany over the period 1990–2024, we provide evidence that cumulative divergences between prices and wages generate persistent effects on real wages, aggregate demand, and employment. Our findings highlight that long-memory wage dynamics amplify the unemployment consequences of investment-driven accumulation, demonstrating a structural mechanism through which distributive conflict and inflation interact. 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