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The Profit-Investment-Unemployment nexus and Capacity Utilization in a Stock-Flow Consistent Model

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  • Jean-Bernard Chatelain

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

Abstract

This paper studies under which conditions the share of profit in value-added, financial constraints on investment and capital shortage may foster unemployment and may limit the growth of capital and/or the growth of aggregate demand, in a stock-flow consistent model. The efficiency of demand-side versus supply-side economic policies (decrease of the real interest rate and/or of the real wage, increase of the leverage ceiling constraint) depends on capital shortage and credit rationing, which are not necessarily simultaneous due to the effects of investment on aggregate demand and supply.

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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-00645155.

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Date of creation: 2010
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Publication status: Published, Metroeconomica, 2010, 61, 3, 454-472
Handle: RePEc:hal:cesptp:hal-00645155

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  1. Chatelain, Jean-Bernard, 2001. "Mark-up and capital structure of the firm facing uncertainty," Economics Letters, Elsevier, Elsevier, vol. 74(1), pages 99-105, December.
  2. Edwin Le Heron & Tarik Mouakil, 2008. "A Post-Keynesian Stock-Flow Consistent Model For Dynamic Analysis Of Monetary Policy Shock On Banking Behaviour," Metroeconomica, Wiley Blackwell, Wiley Blackwell, vol. 59(3), pages 405-440, 07.
  3. 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.
  4. Constantinos Alexiou & Christos Pitelis, 2003. "On capital shortages and European unemployment: a panel data investigation," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 25(4), pages 613-640, July.
  5. Amable, Bruno & Chatelain, Jean-Bernard & Ralf, Kirsten, 2004. "Credit rationing, profit accumulation and economic growth," Economics Letters, Elsevier, Elsevier, vol. 85(3), pages 301-307, December.
  6. Constantinos Alexiou, 2001. "Crafting a Post Keynesian Macroeconomic Framework to Explain European Unemployment: Econometric Evidence from the European Union Countries," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 24(1), pages 59-80, October.
  7. Philip Arestis & Michelle Baddeley & Malcolm Sawyer, 2007. "The Relationship Between Capital Stock, Unemployment And Wages In Nine Emu Countries," Bulletin of Economic Research, Wiley Blackwell, Wiley Blackwell, vol. 59(2), pages 125-148, 04.
  8. repec:ebl:ecbull:v:28:y:2004:i:18:p:a0 is not listed on IDEAS
  9. Hein, Eckhard, 2004. "Interest rate, debt, distribution and capital accumulation in a post-Kaleckian model," WSI Discussion Papers 133, Wirtschafts- und Sozialwissenschaftliches Institut (WSI), Hans-Böckler-Stiftung.
  10. Chatelain, Jean-Bernard & Teurlai, Jean-Christophe, 2006. "Euler investment equation, leverage and cash flow misspecification: An empirical analysis on a panel of French manufacturing firms," Journal of Macroeconomics, Elsevier, Elsevier, vol. 28(2), pages 361-374, June.
  11. Chatelain, Jean-Bernard, 1998. "Investment Facing Credit Rationing," The Manchester School of Economic & Social Studies, University of Manchester, University of Manchester, vol. 66(0), pages 102-15, Supplemen.
  12. repec:fth:banfra:84 is not listed on IDEAS
  13. Neri Salvadori, 2004. "Economic growth and distribution: on the nature and causes of the wealth of nations," Economics Bulletin, AccessEcon, vol. 28(18), pages A0.
  14. Anwar Shaikh, 2009. "Economic Policy In A Growth Context: A Classical Synthesis Of Keynes And Harrod," Metroeconomica, Wiley Blackwell, Wiley Blackwell, vol. 60(3), pages 455-494, 07.
  15. Jean-Bernard Chatelain, 2000. "Explicit Lagrange Multiplier for Firms Facing a Debt Ceiling Constraint," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119408, HAL.
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Cited by:
  1. Eugenio Caverzasi & Antoine Godin, 2013. "Stock-flow Consistent Modeling through the Ages," Economics Working Paper Archive wp_745, Levy Economics Institute.
  2. Antoine Godin, 2012. "Guaranteed Green Jobs: Sustainable Full Employment," Economics Working Paper Archive wp_722, Levy Economics Institute.

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