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Growth, Capital Scrapping, and the Rate of Capacity Utilisation

  • Olivier Allain


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, UPD5 - Université Paris Descartes - Paris 5)

  • Nicolas Canry


    (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)

The aim of this short article is to build a model in order to take into account capital scrapping (or bankruptcies) in an income distribution and growth model. The reason to introduce capital scrapping results from the intuition of some inconsistencies between theoretical predictions and empirical facts: the rate of capacity utilisation data often exhibit a greater stability than it is expected after reading theoretical models. We think that capital scrapping might contribute to stabilise the utilisation rate. The idea is as follows: an increase of the profit share implies a decrease of the rate of capacity utilisation which then involves a rise in capital scrapping (or in the rate of bankruptcies).

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00355932.

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Date of creation: 01 Nov 2008
Date of revision:
Publication status: Published in 12th Workshop on the Research Network "Macroeconomic Policies", Nov 2008, Berlin, Germany
Handle: RePEc:hal:cesptp:hal-00355932
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  1. Peter Skott, 2012. "Theoretical And Empirical Shortcomings Of The Kaleckian Investment Function," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 109-138, 02.
  2. Bhaduri, Amit, 1972. "Unwanted Amortisation Funds," Economic Journal, Royal Economic Society, vol. 82(326), pages 674-77, June.
  3. Eckhard Hein & Lena Vogel, 2008. "Distribution and growth reconsidered: empirical results for six OECD countries," Cambridge Journal of Economics, Oxford University Press, vol. 32(3), pages 479-511, May.
  4. Olivier Allain & Nicolas Canry, 2007. "Distribution and Growth in France (1982-2006): A Cointegrated VAR Approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00192267, HAL.
  5. Steindl, Josef, 1979. "Stagnation Theory and Stagnation Policy," Cambridge Journal of Economics, Oxford University Press, vol. 3(1), pages 1-14, March.
  6. Marc Lavoie & Gabriel Rodriguez & Mario Seccareccia, 2004. "Similitudes and Discrepancies in Post-Keynesian and Marxist Theories of Investment: A Theoretical and Empirical Investigation," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 127-149.
  7. Mario Cassetti, 2006. "A note on the long-run behaviour of Kaleckian models," Review of Political Economy, Taylor & Francis Journals, vol. 18(4), pages 497-508.
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