Growth with Unused Capacity and Endogenous Depreciation
AbstractThis paper contributes to the debate on income growth and distribution from a nonmainstream perspective. It looks, in particular, at the role that the degree of capacity utilization plays in the process of growth of an economy that is not perfectly competitive. The distinctive feature of the model presented in the paper is the hypothesis that the rate of capital depreciation is an increasing function of the degree of capacity utilization. This hypothesis implies analytical results that differ somewhat from those yielded by other Kaleckian models. Our model shows that, in a number of cases, the process of growth can be profit-led rather than wage-led. The model also determines the value to which the degree of capacity utilization converges in the long run.
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Bibliographic InfoPaper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_795.
Date of creation: Apr 2014
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Kaleckian Models of Growth; Capital Accumulation; Capital Depreciation; Income Distribution and Growth;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
This paper has been announced in the following NEP Reports:
- NEP-ACC-2014-04-11 (Accounting & Auditing)
- NEP-ALL-2014-04-11 (All new papers)
- NEP-FDG-2014-04-11 (Financial Development & Growth)
- NEP-GER-2014-04-11 (German Papers)
- NEP-GRO-2014-04-11 (Economic Growth)
- NEP-MAC-2014-04-11 (Macroeconomics)
- NEP-PKE-2014-04-11 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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