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Corporate Debt, Rentiers’ Portfolio Dynamics, Instability and Growth: A Neo-Kaleckian Perspective

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  • Pintu Parui

Abstract

Considering a stock-flow consistent neo-Kaleckian macromodel of the post-COVID-19 US economy, along with firms’ debt dynamics, in the long run, we incorporate portfolio dynamics of rentiers and investigate the possibility dynamic (in)stability of the economy. Both the debt-led and the debt-burdened demand and growth regimes are possible. We find share buybacks, under certain conditions, not only may lead to the deterioration of the equilibrium rate of capital accumulation in the long-run but may also potentially destabilize the entire economy. A strictly regulated financial market is desirable, as otherwise, the economy may lose its stability and produces the limit cycles. A new paradox in neo-Kaleckian tradition, the paradox of share buybacks is also uncovered in this article. JEL Classification: C62, E12, E32, E44, O41

Suggested Citation

  • Pintu Parui, 2025. "Corporate Debt, Rentiers’ Portfolio Dynamics, Instability and Growth: A Neo-Kaleckian Perspective," South Asian Journal of Macroeconomics and Public Finance, , vol. 14(1), pages 60-98, June.
    • Handle: RePEc:sae:smppub:v:14:y:2025:i:1:p:60-98
    DOI: 10.1177/22779787251336524
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    Keywords

    Capital accumulation; Kaleckian model; stock-flow consistency; instability; limit cycle;
    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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