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Worker Household Debt, Functional Income Distribution and Growth: a neo-Kaleckian Perspective

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  • Parui, Pintu

Abstract

In a stock-flow consistent neo-Kaleckian macro-model, along with worker households' debt dynamics, in the long-run, we incorporate distributional dynamics and demonstrate the possibility of multiple equilibria. Dynamic stability of the economy is also examined. Both debt-led and debt-burdened demand and growth regimes are possible in short-run as well as in the long-run. We find that mergers, acquisitions and hostile takeovers play a crucial role for (de)stabilizing the economy. In some instances, the speed of the adjustment parameter of the distributional dynamics becomes crucial for stabilizing the economy. Otherwise, the economy may lose its stability and gives birth to limit cycles.

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  • Parui, Pintu, 2020. "Worker Household Debt, Functional Income Distribution and Growth: a neo-Kaleckian Perspective," MPRA Paper 102384, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102384
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    Cited by:

    1. Pintu Parui, 2022. "Corporate debt, endogenous dividend rate, instability and growth," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 514-549, May.
    2. Parui, Pintu, 2021. "Financialization and endogenous technological change: A post-Kaleckian perspective," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 221-244.
    3. Parui, Pintu, 2020. "Corporate Debt, Rentiers' Portfolio Dynamics, Instability and Growth: A neo-Kaleckian Perspective," MPRA Paper 102870, University Library of Munich, Germany.

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    More about this item

    Keywords

    Capital Accumulation; Income Distribution; Worker Household Debt; Kaleckian Model; Limit Cycle; Stock-flow Consistency;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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