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The Profit-Investment-Unemployment nexus and Capacity Utilization in a Stock-Flow Consistent Model

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  • Jean-Bernard Chatelain

    ()

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

This paper studies under which conditions the share of profit in value-added, financial constraints on investment and capital shortage may foster unemployment and may limit the growth of capital and/or the growth of aggregate demand, in a stock-flow consistent model. The efficiency of demand-side versus supply-side economic policies (decrease of the real interest rate and/or of the real wage, increase of the leverage ceiling constraint) depends on capital shortage and credit rationing, which are not necessarily simultaneous due to the effects of investment on aggregate demand and supply.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00645155.

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Date of creation: 2010
Date of revision:
Publication status: Published, Metroeconomica, 2010, 61, 3, 454-472
Handle: RePEc:hal:cesptp:hal-00645155
Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00645155
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  1. Edwin Le Heron & Tarik Mouakil, 2008. "A Post-Keynesian Stock-Flow Consistent Model For Dynamic Analysis Of Monetary Policy Shock On Banking Behaviour," Metroeconomica, Wiley Blackwell, vol. 59(3), pages 405-440, 07.
  2. Neri Salvadori, 2004. "Economic growth and distribution: on the nature and causes of the wealth of nations," Economics Bulletin, AccessEcon, vol. 28(18), pages A0.
  3. Chatelain, J.-B., 2001. "Mark-up and Capital Structure of the Firm facing Uncertainty," Working papers 84, Banque de France.
  4. Anwar Shaikh, 2009. "Economic Policy In A Growth Context: A Classical Synthesis Of Keynes And Harrod," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 455-494, 07.
  5. Chatelain, Jean-Bernard, 1998. "Investment Facing Credit Rationing," The Manchester School of Economic & Social Studies, University of Manchester, vol. 66(0), pages 102-15, Supplemen.
  6. Peter Skott, 2008. "Theoretical and empirical shortcomings of the Kaleckian investment function," UMASS Amherst Economics Working Papers 2008-11, University of Massachusetts Amherst, Department of Economics, revised Dec 2009.
  7. Chatelain, Jean-Bernard & Teurlai, Jean-Christophe, 2006. "Euler investment equation, leverage and cash flow misspecification: An empirical analysis on a panel of French manufacturing firms," Journal of Macroeconomics, Elsevier, vol. 28(2), pages 361-374, June.
  8. repec:ebl:ecbull:v:28:y:2004:i:18:p:a0 is not listed on IDEAS
  9. Jean-Bernard Chatelain, 2000. "Explicit Lagrange Multiplier for Firms Facing a Debt Ceiling Constraint," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119408, HAL.
  10. Constantinos Alexiou, 2001. "Crafting a Post Keynesian Macroeconomic Framework to Explain European Unemployment: Econometric Evidence from the European Union Countries," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 24(1), pages 59-80, October.
  11. Jean-Bernard Chatelain & Bruno Amable & Kirsten Ralf, 2004. "Credit rationing, profit accumulation and economic growth," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00112521, HAL.
  12. Philip Arestis & Michelle Baddeley & Malcolm Sawyer, 2007. "The Relationship Between Capital Stock, Unemployment And Wages In Nine Emu Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 59(2), pages 125-148, 04.
  13. Eckhard Hein, 2004. "Interest rate, debt, distribution and capital accumulation in a post-Kaleckian model," Macroeconomics 0412005, EconWPA.
  14. Constantinos Alexiou & Christos Pitelis, 2003. "On capital shortages and European unemployment: a panel data investigation," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 25(4), pages 613-640, July.
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Cited by:

  1. Eugenio Caverzasi & Antoine Godin, 2013. "Stock-flow Consistent Modeling through the Ages," Economics Working Paper Archive wp_745, Levy Economics Institute.

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