Abstract
We model the interaction between capitalists and entrepreneurs as a dynamic game. The
open-loop Nash equilibrium and the closed-loop Nash equilibrium are distinguished. The
purpose is to answer some questions that have arisen in the development of profit-led versus
wage-led growth models. We find that the rate of profit and the discount rate as well as the
responsiveness of the wage rate or aggregate consumption to the accumulation of capital are
critical to explaining the change in regimes.