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Some instability puzzles in Kaleckian models of growth and distribution: a critical survey

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  • Eckhard Hein
  • Marc Lavoie
  • Till van Treeck

Abstract

We tackle the issue of the possible instability of the Kaleckian distribution and growth model. Distinguishing between Keynesian and Harrodian instability, we review various mechanisms that have been proposed by critics of the Kaleckian model to tame Harrodian instability while bringing back the rate of utilisation to its normal rate. We find that the mechanisms that have been suggested are far from convincing. Therefore, we conclude that it may be premature for the critics of the Kaleckian model to dismiss the endogeneity of the rate of capacity utilisation in long-run growth equilibrium. Copyright The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Cambridge Journal of Economics.

Volume (Year): 35 (2011)
Issue (Month): 3 ()
Pages: 587-612

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Handle: RePEc:oup:cambje:v:35:y:2011:i:3:p:587-612

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Cited by:
  1. Sergio Cesaratto, 2012. "Neo-Kaleckian and Sraffian controversies on accumulation theory," Department of Economics University of Siena 650, Department of Economics, University of Siena.
  2. Hein, Eckhard & Schoder, Christian, 2009. "Interest rates, distribution and capital accumulation – A Post-Kaleckian perspective on the US and Germany," MPRA Paper 18223, University Library of Munich, Germany.
  3. Christian Schoder, 2012. "Effective demand, exogenous normal utilization and endogenous capacity in the long run. Evidence from a CVAR analysis for the US," IMK Working Paper 103-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  4. Mark Setterfield, 2012. "Exploring the Supply Side of Kaldorian Growth Models," Working Papers 1206, Trinity College, Department of Economics.
  5. Romar Correa, 2010. "Regime-Changes in a Stock-Flow-Consistent Model," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 8(1), pages 24-33.
  6. Thomas I. Palley, 2012. "A neo-Kaleckian - Goodwin model of capitalist economic growth: Monopoly power,managerial pay, labor market conflict, and endogenous technical progress," IMK Working Paper 105-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  7. Hein, Eckhard, 2011. "Distribution, ‘Financialisation’ and the Financial and Economic Crisis – Implications for Post-crisis Economic Policies," MPRA Paper 31180, University Library of Munich, Germany.
  8. Hiroaki Sasaki, 2011. "Is the Long-run Equilibrium Wage-led or Profit-led? A Kaleckian Approach," Discussion papers e-11-002, Graduate School of Economics Project Center, Kyoto University.
  9. Christian Schoder, 2012. "Instability, stationary utilization and effective demand: A synthesis of Harrodian and Kaleckian growth theory," IMK Working Paper 104-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  10. Schoder, Christian, 2011. "Kaleckian vs. Marxian specifications of the investment function: Some empirical evidence for the US," MPRA Paper 29584, University Library of Munich, Germany.
  11. Fabrizio Patriarca & Claudio Sardoni, 2014. "Growth with Unused Capacity and Endogenous Depreciation," Economics Working Paper Archive wp_795, Levy Economics Institute.
  12. Peter Skott, 2012. "Pluralism, the Lucas critique, and the integration of macro and micro," UMASS Amherst Economics Working Papers 2012-04, University of Massachusetts Amherst, Department of Economics.
  13. Commendatore, Pasquale & Pinto, Antonio & Sushko, Iryna, 2014. "A post-Keynesian model of growth and distribution with a constraint on investment," Structural Change and Economic Dynamics, Elsevier, vol. 28(C), pages 12-24.
  14. Eckhard Hein, 2013. "Finance-dominated Capitalism and Redistribution of Income: A Kaleckian Perspective," Economics Working Paper Archive wp_746, Levy Economics Institute.
  15. Sasaki, Hiroaki, 2012. "Is the long-run equilibrium wage-led or profit-led? A Kaleckian approach," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 231-244.
  16. Christian Schoder, 2012. "Endogenous capital productivity in the Kaleckian growth model. Theory and Evidence," IMK Working Paper 102-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  17. Kronenberg, Tobias, 2010. "Finding common ground between ecological economics and post-Keynesian economics," Ecological Economics, Elsevier, vol. 69(7), pages 1488-1494, May.

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