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Kaleckian Models of Growth in a Stock-Flow Monetary Framework: A Neo-Kaldorian Model

  • Marc Lavoie
  • Wynne Godley

This paper presents a simple growth model grounded in a stock-flow monetary accounting framework. The framework ensures that all stocks and all flows are accounted for and that the real and financial sides of the economy are coherent with one another. Credit, money, equities and stocks of real capital link periods of time with one another in articulated sequences. Wealth is allocated between assets on Tobinesque principles but no equilibrium condition is necessary to bring the "demand" for money into equivalence with its "supply". Growth and profit rates, as well as valuation, debt and capacity utilization ratios are analysed using simulations in which a growing economy is assumed to be shocked by changes in interest rates, liquidity preference, real wages, and the parameters which determine how firms finance investment. acceleration in recent years that might explain the growth in earnings inequality. There has also been no dramatic change in the number of workers who are undereducated. These results reinforce the conclusions of earlier work that reports of a growing skills mismatch are likely overdrawn.

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Paper provided by Levy Economics Institute in its series Economics Working Paper Archive with number wp_302.

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Date of creation: Jun 2000
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Handle: RePEc:lev:wrkpap:wp_302
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  4. Chick, Victoria, 1995. "Is There a Case for Post Keynesian Economics?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 42(1), pages 20-36, February.
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  8. Skott, Peter, 1981. "On the 'Kaldorian' Saving Function," Kyklos, Wiley Blackwell, vol. 34(4), pages 563-81.
  9. Wynne Godley, 1996. "Money, Finance and National Income Determination: An Integrated Approach," Economics Working Paper Archive wp_167, Levy Economics Institute.
  10. Godley, Wynne, 1999. "Money and Credit in a Keynesian Model of Income Determination," Cambridge Journal of Economics, Oxford University Press, vol. 23(4), pages 393-411, July.
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  13. Davidson, Paul, 1972. "Money and the Real World," Economic Journal, Royal Economic Society, vol. 82(325), pages 101-15, March.
  14. Lavoie, Marc, 1999. "The Credit-Led Supply of Deposits and the Demand for Money: Kaldor's Reflux Mechanism as Previously Endorsed by Joan Robinson," Cambridge Journal of Economics, Oxford University Press, vol. 23(1), pages 103-13, January.
  15. Lewis, Mervyn K. & Mizen, Paul D., 2000. "Monetary Economics," OUP Catalogue, Oxford University Press, number 9780198290629, March.
  16. Martin H. Wolfson, 1996. "A Post Keynesian Theory of Credit Rationing," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 18(3), pages 443-470, April.
  17. Lavoie, M, 1995. "The Neo-Painetti Theorem in Cambridgian and Keleckian Models of Growth and Distribution," Working Papers 9518e, University of Ottawa, Department of Economics.
  18. Lavoie, M. & Seccareccia, M., 1999. "Minsky's Financial Fragility Hypothesis: a Missing Macroeconomic Link?," Working Papers 9904e, University of Ottawa, Department of Economics.
  19. Marris, Robin, 1972. "Why Economics Needs a Theory of the Firm," Economic Journal, Royal Economic Society, vol. 82(325), pages 321-52, Supplemen.
  20. Leonce Ndikumana, 1999. "Debt Service, Financing Constraints, and Fixed Investment: Evidence from Panel Data," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 21(3), pages 455-478, April.
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  24. Marc Lavoie, 1998. "The Neo-Pasinetti Theorem in Cambridge and Kaleckian Models of Growth and Distribution," Eastern Economic Journal, Eastern Economic Association, vol. 24(4), pages 417-434, Fall.
  25. Dumenil, Gerard & Levy, Dominique, 1999. "Being Keynesian in the Short Term and Classical in the Long Term: The Traverse to Classical Long-Term Equilibrium," Manchester School, University of Manchester, vol. 67(6), pages 684-716, December.
  26. repec:cup:cbooks:9780521365963 is not listed on IDEAS
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