Convergence towards the normal rate of capacity utilization in neo-Kaleckian models: the role of non-capacity creating autonomous expenditures
Neo-Kaleckian models of growth and distribution have been highly popular among heterodox economists. Two drawbacks of these models have, however, been underlined in the literature: first, the models do not usually converge to their normal rate of capacity utilization; second, the models do not include the Harrodian principle of dynamic instability. Some Sraffian economists have long been arguing that the presence of non-capacity creating autonomous expenditures provides a mechanism that brings back the model to normal rates of capacity utilization, while safeguarding the main Keynesian message and without going back to classical conclusions. The present article provides a very simple proof of this, showing within a neo-Kaleckian model that the Harrodian principle of dynamic instability gets tamed by the presence of autonomous consumer expenditures.
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|Date of creation:||2016|
|Publication status:||Published in Metroeconomica, Wiley, 2016, 76 (1), pp.172-201. <10.1111/meca.12109>|
|Note:||View the original document on HAL open archive server: https://hal-univ-paris13.archives-ouvertes.fr/hal-01343732|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|