Kalecki’s Economics and Explanations of the Economic Crisis

In this study, we seek to outline those aspects of Kalecki’s writings which are relevant for explaining the prolonged world recession since 1973, and to make some assessment of the validity of the explanations implicit in Kalecki’s work for recession. Much of Kalecki’s work on developed capitalist economies was written in the 1930s and 1940s, and was strongly influenced by the economic crisis of the interwar period, and in some respects, we are attempting to apply explanations developed in response to one worldwide recession to another. There have, of course, been significant changes in economies and relationship between national economies since the 1930s. Kalecki would probably have amended the details of his analysis to take account of such structural changes in economies, and may well have found different explanations for the current crisis than those he used for the interwar crisis. Other writings of Kalecki which are heavily drawn on below are those which arise from his wartime discussions of the prospects for capitalist economies in the postwar period.