IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-01343732.html
   My bibliography  Save this paper

Convergence towards the normal rate of capacity utilization in neo-Kaleckian models: the role of non-capacity creating autonomous expenditures

Author

Listed:
  • Marc Lavoie

    (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique, University of Ottawa [Ottawa])

Abstract

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.

Suggested Citation

  • Marc Lavoie, 2016. "Convergence towards the normal rate of capacity utilization in neo-Kaleckian models: the role of non-capacity creating autonomous expenditures," Post-Print hal-01343732, HAL.
  • Handle: RePEc:hal:journl:hal-01343732
    DOI: 10.1111/meca.12109
    Note: View the original document on HAL open archive server: https://hal-univ-paris13.archives-ouvertes.fr/hal-01343732
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Peter Skott, 2012. "Theoretical And Empirical Shortcomings Of The Kaleckian Investment Function," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 109-138, February.
    2. Dutt, Amitava Krishna, 1997. "Profit-Rate Equalization in the Kalecki-Steindl Model and the "Over-Determination" Problem," The Manchester School of Economic & Social Studies, University of Manchester, vol. 65(4), pages 443-451, September.
    3. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
    4. Jamee K. Moudud, 2010. "Strategic Competition, Dynamics, and the Role of the State," Books, Edward Elgar Publishing, number 4241, June.
    5. Christopher Brown, 2008. "Inequality, Consumer Credit and the Saving Puzzle," Books, Edward Elgar Publishing, number 12877, June.
    6. Bhaduri, Amit & Marglin, Stephen, 1990. "Unemployment and the Real Wage: The Economic Basis for Contesting Political Ideologies," Cambridge Journal of Economics, Oxford University Press, vol. 14(4), pages 375-393, December.
    7. Marc Lavoie, 2014. "Post-Keynesian Economics," Books, Edward Elgar Publishing, number 12857, June.
    8. Skott,Peter, 2008. "Conflict and Effective Demand in Economic Growth," Cambridge Books, Cambridge University Press, number 9780521066310.
    9. Olivier Allain, 2015. "Tackling the instability of growth: a Kaleckian-Harrodian model with an autonomous expenditure component," Cambridge Journal of Economics, Oxford University Press, vol. 39(5), pages 1351-1371.
    10. Steven M. Fazzari & Pietro E. Ferri & Edward G. Greenberg & Anna Maria Variato, 2013. "Aggregate demand, instability, and growth," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(1), pages 1-21, January.
    11. Olivier Allain, 2015. "Tackling the instability of growth: a Kaleckian-Harrodian model with an autonomous expenditure component," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01298599, HAL.
    12. Sergio Cesaratto, 2015. "Neo-Kaleckian and Sraffian Controversies on the Theory of Accumulation," Review of Political Economy, Taylor & Francis Journals, vol. 27(2), pages 154-182, April.
    13. Eckhard Hein, 2014. "Distribution and Growth after Keynes," Books, Edward Elgar Publishing, number 15903, June.
    14. Eckhard Hein & Marc Lavoie & Till van Treeck, 2012. "Harrodian Instability And The ‘Normal Rate’ Of Capacity Utilization In Kaleckian Models Of Distribution And Growth—A Survey," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 139-169, February.
    15. Serrano, Franklin, 1995. "Long Period Effective Demand and the Sraffian Supermultiplier," Contributions to Political Economy, Oxford University Press, vol. 14(0), pages 67-90.
    16. Amitava Krishna Dutt, 2006. "Maturity, Stagnation And Consumer Debt: A Steindlian Approach," Metroeconomica, Wiley Blackwell, vol. 57(3), pages 339-364, July.
    17. Skott, Peter, 2005. "Fairness as a source of hysteresis in employment and relative wages," Journal of Economic Behavior & Organization, Elsevier, vol. 57(3), pages 305-331, July.
    18. Marc Lavoie, 1996. "Traverse, Hysteresis, and Normal Rates of Capacity Utilization in Kaleckian Models of Growth and Distribution," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(4), pages 113-147, December.
    19. Amitava Krishna Dutt, 2011. "The role of aggregate demand in classical-Marxian models of economic growth," Cambridge Journal of Economics, Oxford University Press, vol. 35(2), pages 357-382.
    20. Marc Lavoie, 2014. "Post-Keynesian Economics: New Foundations," Post-Print hal-01343652, HAL.
    21. Christian Schoder, 2014. "Effective Demand, Exogenous Normal Utilization and Endogenous Capacity in the Long Run: Evidence from a Cointegrated Vector Autoregression Analysis for the USA," Metroeconomica, Wiley Blackwell, vol. 65(2), pages 298-320, May.
    22. Park, Man-Seop, 1995. "A Note on the "Kalecki-Steindl" Steady-State Approach to Growth and Income Distribution," The Manchester School of Economic & Social Studies, University of Manchester, vol. 63(3), pages 297-310, September.
    23. Antonella Palumbo & Attilio Trezzini, 2003. "Growth without normal capacity utilization," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 10(1), pages 109-135.
    24. Trezzini, Attilio, 1995. "Capacity Utilisation in the Long Run and the Autonomous Components of Aggregate Demand," Contributions to Political Economy, Oxford University Press, vol. 14(0), pages 33-66.
    25. Aldo Barba & Massimo Pivetti, 2009. "Rising household debt: Its causes and macroeconomic implications--a long-period analysis," Cambridge Journal of Economics, Oxford University Press, vol. 33(1), pages 113-137, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marwil J. Dávila-Fernández & José L. Oreiro & Mario W. D. Dávila, 2018. "Endogenizing Non-Price Competitiveness In A Model With Capital Accumulation And Bopc On Growth," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 83, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Eckhard Hein, 2016. "Autonomous government expenditure growth, deficits, debt and distribution in a neo-Kaleckian growth model," Working Papers 2016-02, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    3. Pariboni, Riccardo & Girardi, Daniele, 2018. "A(nother) Note on the Inconsistency of Neo-Kaleckian Growth Models," Centro Sraffa Working Papers CSWP31, Centro di Ricerche e Documentazione "Piero Sraffa".
    4. Daniele Girardi & Riccardo Pariboni, 2018. "Normal utilization as the adjusting variable in Neo-Kaleckian growth models : a critique," UMASS Amherst Economics Working Papers 2018-11, University of Massachusetts Amherst, Department of Economics.
    5. repec:bla:metroe:v:68:y:2017:i:1:p:194-199 is not listed on IDEAS
    6. Sergio Cesaratto, 2016. "The modern revival of the Classical surplus approach: implications for the analysis of growth and crises," Department of Economics University of Siena 735, Department of Economics, University of Siena.
    7. Leandro Gomes & Fabio Freitas, 2018. "A Dinâmica Inflacionária No Brasil De 2000 A 2009: Uma Abordagem Multisetorial," Anais do XLIV Encontro Nacional de Economia [Proceedings of the 44th Brazilian Economics Meeting] 28, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Sergio Cesaratto, 2017. "Beyond the traditional monetary circuit: endogenous money, finance and the theory of long-period effective demand," Department of Economics University of Siena 757, Department of Economics, University of Siena.
    9. Mauro Caminati & Serena Sordi, 2017. "Demand-led growth with endogenous innovation," Department of Economics University of Siena 764, Department of Economics, University of Siena.
    10. repec:bla:metroe:v:68:y:2017:i:1:p:185-193 is not listed on IDEAS
    11. Peter Skott, 2016. "Autonomous demand, Harrodian instability and the supply side," UMASS Amherst Economics Working Papers 2016-16, University of Massachusetts Amherst, Department of Economics.
    12. Cesaratto, Sergio, 2017. "Garegnani, Ackley and the years of high theory at Svimez," Centro Sraffa Working Papers CSWP26, Centro di Ricerche e Documentazione "Piero Sraffa".

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-01343732. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.