I have been working recently on an extended version of the Goodwin model using methods similar to your own. Referring to your paper from 1995 on your modified Goodwin model (–617), where investment is a function of profit rate, and there is no Household savings (all worker income goes to consumption), I have the following comment:
Unless I have misunderstood something, it would seem that your model violates the sector balance equation, which is in this case:
Y-WL-rD –I (production sector surplus)+ 0 (Household sector surplus) + rD (Bank sector surplus) =0.
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