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Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte

Author

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  • Mark Setterfield

    (Department of Economics, New School for Social Research)

Abstract

This reply to Botte (2019) responds to criticisms of the methods used to estimate the normal rate of capacity utilization and a tolerable interval of variation in the actual rate of capacity utilization around the normal rate in Setterfield (2019a). It concludes with some further reflections on the concept of corridor instability.

Suggested Citation

  • Mark Setterfield, 2019. "Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte," Working Papers 1905, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1905
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    File URL: http://www.economicpolicyresearch.org/econ/2019/NSSR_WP_052019.pdf
    File Function: First version, 2019
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    References listed on IDEAS

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    4. Michalis Nikiforos, 2016. "On the ‘utilisation controversy’: a theoretical and empirical discussion of the Kaleckian model of growth and distribution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(2), pages 437-467.
    5. Edward Amadeo, 1987. "Expectations in a steady state model of capacity utilization," Textos para discussão 169, Department of Economics PUC-Rio (Brazil).
    6. Shyam Gouri Suresh & Mark Setterfield, 2015. "Firm performance, macroeconomic conditions, and “animal spirits” in a Post Keynesian model of aggregate fluctuations," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(1), pages 38-63, July.
    7. Peter Skott, 2019. "Autonomous demand, Harrodian instability and the supply side," Metroeconomica, Wiley Blackwell, vol. 70(2), pages 233-246, May.
    8. Michalis Nikiforos, 2018. "Some comments on the Sraffian Supermultiplier approach to growth and distribution," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 41(4), pages 659-675, October.
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    11. Mark Setterfield & Joana David Avritzer, 2020. "Hysteresis in the normal rate of capacity utilization: A behavioral explanation," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 898-919, November.
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    13. Eckhard Hein & Marc Lavoie & Till van Treeck, 2012. "Harrodian Instability And The ‘Normal Rate’ Of Capacity Utilization In Kaleckian Models Of Distribution And Growth—A Survey," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 139-169, February.
    14. Mark Setterfield, 2019. "Long-run variation in capacity utilization in the presence of a fixed normal rate," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 443-463.
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    18. Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Oxford University Press, vol. 35(3), pages 587-612.
    19. Michalis Nikiforos, 2018. "Some Comments on the Sraffian Supermultiplier Approach to Growth and Distribution," Economics Working Paper Archive wp_907, Levy Economics Institute.
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    Cited by:

    1. Mark Setterfield & Joana David Avritzer, 2020. "Hysteresis in the normal rate of capacity utilization: A behavioral explanation," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 898-919, November.

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    More about this item

    Keywords

    Normal rate of capacity utilization; Harrodian instability; corridor instability;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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