The Extended Goodwin Model and Wage–Labor Paradoxes Metric in South Africa

This study extends the post-Keynesian framework for cyclical economic growth, initially proposed by Goodwin in 1967, by integrating government intervention to stabilize employment amidst wage mismatches. Given the pressing challenges of unemployment and wage disparity in developing economies, particularly South Africa, this extension is necessary to better understand how policy interventions can influence labor market dynamics. Central to the study is the endogenous interaction between capital and labor, where class dynamics influence economic growth patterns. The research focuses on the competitive relationship between real wage growth and its effects on employment. Methodologically, the study measures the impact of intervention strategies using a system of coupled ordinary differential equations (Lotka–Volterra type), along with econometric techniques such as quantile regression, moving averages, and mean absolute error to measure wages mismatch. Results demonstrate the inherent contradictions of capitalism under intervention, confirming established theoretical perspectives. This work further contributes to economic optimality discussions, especially regarding the timing and persistence of economic cycles. The model provides a quantifiable approach for formulating intervention strategies to achieve long-term economic equilibrium and sustainable labor–capital coexistence.