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An Evaluation of neo-Kaleckian supermultiplier and neo-Goodwinian models

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  • Brett Fiebinger

Abstract

This paper provides a theoretical and empirical evaluation of neo-Kaleckian supermultiplier and neo-Goodwinian models. The benchmark structuralist and Harrodian neo-Goodwinian models posit a macro economy with only one asset: the capital stock. Demand leakages presuppose that at least one sector is able to realise an excess of revenues over expenditures as a positive accumulation of net financial assets vis-Ã -vis other sectors. Models with a single real asset - and which assume each sector always has nil net lending/borrowing - provide pseudo explanations of real world economic activity. We show that neo-Kaleckian supermultiplier models with overhead labour can account for the induced nature of capacity investment, a pro-cyclical profit share and stylised net lending/borrowing patterns.

Suggested Citation

  • Brett Fiebinger, 2022. "An Evaluation of neo-Kaleckian supermultiplier and neo-Goodwinian models," FMM Working Paper 78-2022, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    • Handle: RePEc:imk:fmmpap:78-2022
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    More about this item

    Keywords

    Pseudo-Goodwin cycles; External markets; Net lending/borrowing; Overhead labour;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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