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Kaleckian Models of Growth in a Coherent Stock-Flow Monetary Framework: A Kaldorian View

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  • Marc Lavoie
  • Wynne Godley

Abstract

This paper presents a demand-led growth model grounded in a coherent stock-flow monetary accounting framework, where all stocks and flows are accounted for. Wealth is allocated between assets on Tobinesque principles, but no equilibrium condition is necessary to bring the “demand” for money into equivalence with its “supply.” Growth and profit rates, as well as valuation, debt, and capacity utilization ratios are analyzed using simulations in which a growing economy is assumed to be shocked by changes in interest rates, liquidity preference, real wages, and the parameters that determine how firms finance investment.

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  • Marc Lavoie & Wynne Godley, 2001. "Kaleckian Models of Growth in a Coherent Stock-Flow Monetary Framework: A Kaldorian View," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 24(2), pages 277-311, December.
    • Handle: RePEc:mes:postke:v:24:y:2001:i:2:p:277-311
    DOI: 10.1080/01603477.2001.11490327
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    References listed on IDEAS

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    1. Russell Rimmer, 1993. "Income Distribution In A Corporate Economy," Books, Edward Elgar Publishing, number 374.
    2. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-115, March.
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