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Kaleckian Models of Growth in a Stock-Flow Monetary Framework: A Neo-Kaldorian Model

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  • Marc Lavoie
  • Wynne Godley

Abstract

This paper presents a simple growth model grounded in a stock-flow monetary accounting framework. The framework ensures that all stocks and all flows are accounted for and that the real and financial sides of the economy are coherent with one another. Credit, money, equities and stocks of real capital link periods of time with one another in articulated sequences. Wealth is allocated between assets on Tobinesque principles but no equilibrium condition is necessary to bring the "demand" for money into equivalence with its "supply". Growth and profit rates, as well as valuation, debt and capacity utilization ratios are analysed using simulations in which a growing economy is assumed to be shocked by changes in interest rates, liquidity preference, real wages, and the parameters which determine how firms finance investment. acceleration in recent years that might explain the growth in earnings inequality. There has also been no dramatic change in the number of workers who are undereducated. These results reinforce the conclusions of earlier work that reports of a growing skills mismatch are likely overdrawn.

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Bibliographic Info

Paper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_302.

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Date of creation: Jun 2000
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Handle: RePEc:lev:wrkpap:wp_302

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  19. Marc Lavoie, 1998. "The Neo-Pasinetti Theorem in Cambridge and Kaleckian Models of Growth and Distribution," Eastern Economic Journal, Eastern Economic Association, vol. 24(4), pages 417-434, Fall.
  20. Lavoie, M, 1995. "The Neo-Painetti Theorem in Cambridgian and Keleckian Models of Growth and Distribution," Working Papers 9518e, University of Ottawa, Department of Economics.
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