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Inconsistency and over‐determination in neo‐Kaleckian growth models: A note

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  • Marwil J. Dávila‐Fernández
  • Jose L. Oreiro
  • Lionello F. Punzo

Abstract

This short note argues that the canonical neo‐Kaleckian growth model does not yield a balanced growth path due to the absence of an inbuilt mechanism by which desired and actual rates of capital accumulation are equalized. Introducing non‐generating capacity autonomous demand does not solve such inconsistency. Contrary to what Lavoie () claims, we show that the latter is also unable to bring capacity utilization to its normal level. In light of recent contributions (e.g., Nikiforos, ), we suggest that making normal capacity utilization an endogenous variable is an alternative better suited to deal with the issue.

Suggested Citation

  • Marwil J. Dávila‐Fernández & Jose L. Oreiro & Lionello F. Punzo, 2019. "Inconsistency and over‐determination in neo‐Kaleckian growth models: A note," Metroeconomica, Wiley Blackwell, vol. 70(2), pages 313-319, May.
    • Handle: RePEc:bla:metroe:v:70:y:2019:i:2:p:313-319
    DOI: 10.1111/meca.12190
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    Cited by:

    1. Daniele Girardi & Riccardo Pariboni, 2019. "Normal utilization as the adjusting variable in Neo‐Kaleckian growth models: A critique," Metroeconomica, Wiley Blackwell, vol. 70(2), pages 341-358, May.
    2. Eric Kemp‐Benedict, 2020. "Convergence of actual, warranted, and natural growth rates in a Kaleckian–Harrodian‐classical model," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 851-881, November.
    3. Biao Huang, 2020. "Normal utilization rate in the Sraffa framework," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 767-780, November.
    4. Pariboni, Riccardo & Girardi, Daniele, 2018. "A(nother) Note on the Inconsistency of Neo-Kaleckian Growth Models," Centro Sraffa Working Papers CSWP31, Centro di Ricerche e Documentazione "Piero Sraffa".

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