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Growth, Capital Scrapping, and the Rate of Capacity Utilisation

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Author Info

  • Olivier Allain

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, UP5 - Université Paris 5, Paris Descartes - Université Paris V - Paris Descartes - PRES Sorbonne Paris Cité)

  • Nicolas Canry

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

The aim of this short article is to build a model in order to take into account capital scrapping (or bankruptcies) in an income distribution and growth model. The reason to introduce capital scrapping results from the intuition of some inconsistencies between theoretical predictions and empirical facts: the rate of capacity utilisation data often exhibit a greater stability than it is expected after reading theoretical models. We think that capital scrapping might contribute to stabilise the utilisation rate. The idea is as follows: an increase of the profit share implies a decrease of the rate of capacity utilisation which then involves a rise in capital scrapping (or in the rate of bankruptcies).

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00355932.

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Date of creation: 01 Nov 2008
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Publication status: Published - Presented, 12th Workshop on the Research Network "Macroeconomic Policies", 2008, Berlin, Germany
Handle: RePEc:hal:cesptp:hal-00355932

Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00355932
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Related research

Keywords: Income distribution ; Capital scrapping ; Rate of Capacity Utilisation ; Imperfect Competition ; Growth;

References

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  1. Olivier Allain & Nicolas Canry, 2007. "Distribution and Growth in France (1982-2006): A Cointegrated VAR Approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers), HAL halshs-00192267, HAL.
  2. Marc Lavoie & Gabriel Rodriguez & Mario Seccareccia, 2004. "Similitudes and Discrepancies in Post-Keynesian and Marxist Theories of Investment: A Theoretical and Empirical Investigation," International Review of Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 18(2), pages 127-149.
  3. Steindl, Josef, 1979. "Stagnation Theory and Stagnation Policy," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 3(1), pages 1-14, March.
  4. Bhaduri, Amit, 1972. "Unwanted Amortisation Funds," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 82(326), pages 674-77, June.
  5. Peter Skott, 2008. "Theoretical and empirical shortcomings of the Kaleckian investment function," UMASS Amherst Economics Working Papers, University of Massachusetts Amherst, Department of Economics 2008-11, University of Massachusetts Amherst, Department of Economics, revised Dec 2009.
  6. repec:hal:journl:halshs-00192267 is not listed on IDEAS
  7. Eckhard Hein & Lena Vogel, 2008. "Distribution and growth reconsidered: empirical results for six OECD countries," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 32(3), pages 479-511, May.
  8. Mario Cassetti, 2006. "A note on the long-run behaviour of Kaleckian models," Review of Political Economy, Taylor & Francis Journals, Taylor & Francis Journals, vol. 18(4), pages 497-508.
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Citations

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Cited by:
  1. Eckhard Hein & Marc Lavoie & Till van Treeck, 2008. "Some instability puzzles in Kaleckian models of growth and distribution: A critical survey," IMK Working Paper, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute 19-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
  2. Kornai, János, 2010. "Hiánygazdaság - többletgazdaság. Tanulmány a piac elméletéről - I. rész
    [Shortage economy surplus economy. A study on market theory I]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 925-957.

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