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Shareholder Value Orientation, Distribution And Growth-Short- And Medium-Run Effects In A Kaleckian Model

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  • Eckhard Hein

Abstract

We discuss the effects of rising shareholder power on distribution and capital accumulation in a Kaleckian model. In the short run, increasing shareholder power may have either positive ('finance-led'), negative ('normal') or 'intermediate' ('profits without investment') effects on capacity utilization, profits and capital accumulation. In the medium run, the positive ('finance-led') effects may be maintained in a stable regime under very special conditions, whereas the negative ('normal') and the 'intermediate' ('profits without investment') effects turn into disequilibrium processes with falling rates of capital accumulation and rising outside finance-capital ratios. Therefore, this process gives rise to a 'paradox of outside finance'. Copyright � 2009 The Author. Journal compilation � 2009 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal Metroeconomica.

Volume (Year): 61 (2010)
Issue (Month): 2 (05)
Pages: 302-332

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Handle: RePEc:bla:metroe:v:61:y:2010:i:2:p:302-332

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Citations

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Cited by:
  1. Eckhard Hein, 2012. ""Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 34(3), pages 475-496, April.
  2. Hein, Eckhard, 2011. "Distribution, 'financialisation' and the financial and economic crisis: Implications for post-crisis economic policies," IPE Working Papers 09/2011, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  3. Hein, Eckhard, 2011. "Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model," IPE Working Papers 11/2011, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  4. Hein, Eckhard & Truger, Achim, 2010. "Finance-dominated capitalism in crisis – the case for a Global Keynesian New Deal," MPRA Paper 21175, University Library of Munich, Germany.
  5. Antonio Bianco & Paolo M. Piacentini, 2013. "The sustainability of a creative-finance-led economy," Working papers, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project wpaper07, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
  6. Georgios Argitis & Stella Michopoulou, 2011. "Are Full Employment and Social Cohesion Possible Under Financialization?," Forum for Social Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 40(2), pages 139-155, January.
  7. Hiroaki Sasaki & Shinya Fujita, 2010. "The Importance of the Retention Ratio in a Kaleckian Model with Debt Accumulation," Discussion papers e-10-008, Graduate School of Economics Project Center, Kyoto University.
  8. Eckhard Hein, 2008. "Financialisation in a comparative static, stock-flow consistent Post-Kaleckian distribution and growth model," IMK Working Paper 21-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  9. Hiroaki Sasaki & Shinya Fujita, 2012. "Income Distribution, Debt Accumulation, and Financial Fragility in a Kaleckian Model with Labor Supply Constraints," Discussion papers e-12-007, Graduate School of Economics Project Center, Kyoto University.
  10. Shinya Fujita & Hiroaki Sasaki, 2011. "Financialization and its Long-run Macroeconomic Effects in a Kalecki-Minsky Model," Discussion papers e-11-001, Graduate School of Economics Project Center, Kyoto University.

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