Explaining persistent cycles in a short-run context: firms’ propensity to invest and omnipotent shareholders
AbstractIn this article, we develop a standard short-run Kaleckian macromodel. First, we study the stability of equilibrium and make some comparative static exercises. Then, we take into account different specifications for an endogenous propensity to invest and systematically analyze the short-run dynamics of the model. We show that when firms’ managers adopt abnormal behaviours due to pressures from shareholders regarding the propensity to invest the system exhibits persistent cycles and chaotic trajectories. The analysis emphasizes that, even in the short-run, shareholders may generate instability which represents a serious threat that should not be underestimated for a capitalist economy.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 18520.
Date of creation: 2009
Date of revision: 2009
Kaleckian model; propensity to invest; fluctuations;
Other versions of this item:
- SÃ©bastien Charles, 2010. "Explaining persistent cycles in a short-run context: firms' propensity to invest and omnipotent shareholders," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 32(3), pages 409-426, April.
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-14 (All new papers)
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