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Public Expenditure Composition And Growth: A Neo-Kaleckian Analysis

Author

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  • Pasquale Commendatore
  • Antonio Pinto

Abstract

In this paper, we put forward a neo-Kaleckian model of growth and dsitribution. We introduce two different types of public expenditure: government consumption expenditure and public provision of capital; and we study the effects on equilibrium capacity utilisation and growth. Two different cases are explored: a) the government size is allowed to vary; b) the government size is fixed and only the composition of public expenditure changes. Our results depart from those drawn by the New Growth Theory. In fact, when capacity is underutilised, and increase in the provision of public capital may reduce the rate of growth, if not accompanied by a sufficient increase in demand.

Suggested Citation

  • Pasquale Commendatore & Antonio Pinto, 2011. "Public Expenditure Composition And Growth: A Neo-Kaleckian Analysis," Cahiers d’économie politique / Papers in Political Economy, L'Harmattan, issue 61, pages 187-222.
    • Handle: RePEc:cpo:journl:y:2011:i:61:p:187-222
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    Citations

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    Cited by:

    1. Gilberto Tadeu Lima & Laura Carvalho, Gustavo Pereira Serra, 2018. "Human Capital Accumulation, Income Distribution and Economic Growth: A Neo-Kaleckian Analytical Framework," Working Papers, Department of Economics 2018_19, University of São Paulo (FEA-USP).
    2. Parui, Pintu, 2020. "Fiscal Expansion, Government Debt and Economic Growth: A Post-Keynesian Perspective," MPRA Paper 102740, University Library of Munich, Germany.
    3. Greg Hannsgen & Tai Young-Taft, 2015. "Inside Money in a Kaldor-Kalecki-Steindl Fiscal Policy Model: The Unit of Account, Inflation, Leverage, and Financial Fragility," Economics Working Paper Archive wp_839, Levy Economics Institute.
    4. Greg Hannsgen, 2014. "Fiscal Policy, Chartal Money, Mark-up Dynamics and Unemployment Insurance in a Model of Growth and Distribution," Metroeconomica, Wiley Blackwell, vol. 65(3), pages 487-523, July.
    5. Parui, Pintu, 2015. "Government Expenditure and Economic Growth: A Demand-side Analysis," MPRA Paper 66855, University Library of Munich, Germany, revised 30 Dec 2019.

    More about this item

    Keywords

    distribution; growth; government expenditure; post-Keynesian theory; Kalecki;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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