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Notes on the accumulation and utilization of capital: Some theoretical issues

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  • Michalis Nikiforos

Abstract

This paper discusses some issues related to the triangle between capital accumulation, distribution, and capacity utilization. First, it explains why utilization is a crucial variable for the various theories of growth and distribution, and, more precisely, with regards to their ability to combine an autonomous role for demand (along Keynesian lines) and an institutionally determined distribution (along classical lines). Second, it responds to some recent criticism by Girardi and Pariboni (2019) and I explain that their interpretation of the model in Nikiforos (2013) is misguided, and that the results of the model can be extended to the case of a monopolist. Third, it provides some concrete examples on why demand is a determinant for the long‐run rate of utilization of capital. Finally, it argues that when it comes to the normal rate of utilization it is the expected growth rate of demand that matters, and not the level of demand. This insight provides a more straightforward way to link the adjustment at the micro and the macro level.

Suggested Citation

  • Michalis Nikiforos, 2023. "Notes on the accumulation and utilization of capital: Some theoretical issues," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 223-247, February.
    • Handle: RePEc:bla:metroe:v:74:y:2023:i:1:p:223-247
    DOI: 10.1111/meca.12407
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    References listed on IDEAS

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    5. 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.
    6. Petach, Luke & Tavani, Daniele, 2019. "No one is alone: Strategic complementarities, capacity utilization, growth, and distribution," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 203-215.
    7. Michalis Nikiforos, 2013. "The (Normal) Rate of Capacity Utilization at the Firm Level," Metroeconomica, Wiley Blackwell, vol. 64(3), pages 513-538, July.
    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.
    9. Marc Lavoie, 2016. "Convergence Towards the Normal Rate of Capacity Utilization in Neo-Kaleckian Models: The Role of Non-Capacity Creating Autonomous Expenditures," Metroeconomica, Wiley Blackwell, vol. 67(1), pages 172-201, February.
    10. Fabio Freitas & Franklin Serrano, 2015. "Growth Rate and Level Effects, the Stability of the Adjustment of Capacity to Demand and the Sraffian Supermultiplier," Review of Political Economy, Taylor & Francis Journals, vol. 27(3), pages 258-281, July.
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    13. Michalis Nikiforos, 2021. "Notes on the accumulation and utilization of capital: Some empirical issues," Metroeconomica, Wiley Blackwell, vol. 72(4), pages 679-695, November.
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    15. Michalis Nikiforos, 2016. "A nonbehavioral theory of saving," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 39(4), pages 562-592, October.
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    18. Serrano, Franklin, 1995. "Long Period Effective Demand and the Sraffian Supermultiplier," Contributions to Political Economy, Cambridge Political Economy Society, vol. 14(0), pages 67-90.
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    20. 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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    2. Codrina Rada & Ansel Shiavone & Rudiger von Arnim, 2024. "An exploration of neo-Goodwinian theory of cyclical growth," Working Papers 2403, New School for Social Research, Department of Economics.

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