Enriching the Neo-Kaleckian Growth Model: Nonlinearities, Political Economy, and Financial Factors
AbstractThis paper expands the neo-Kaleckian growth model to include nonlinearities, political economy factors, and interest rate and stock market effects. The expansions enrich the model and enhance its capacity to analyze and explain developments within contemporary capitalist economies. Nonlinearities can potentially make economies both wage- and profit-led, and failure to control for nonlinearities may result in misleading conclusions about the structure of the economy. Political economy analysis suggests capital’s desire for profit maximization results in a lower growth rate. Lastly, the paper shows why q theory of investment is inconsistent with the neo-Kaleckian approach to capital accumulation and a higher q can be associated with a fall in the rate of investment.
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Bibliographic InfoPaper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp335.
Date of creation: 2013
Date of revision:
wage-led; profit-led; nonlinearities; q theory; stock market; political economy;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-16 (All new papers)
- NEP-PKE-2013-11-16 (Post Keynesian Economics)
- NEP-POL-2013-11-16 (Positive Political 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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IMK Working Paper
18-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
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