On the Utilization Controversy: A Theoretical and Empirical Discussion of the Kaleckian Model of Growth and Distribution
This paper examines the "utilization controversy" around the Kaleckian model of growth and distribution. We show that the Federal Reserve data on capacity utilization, which have been used by both sides of this debate, are the wrong kind of data for the issue under examination. Instead, a more appropriate measurement can be derived from the data on the Average Workweek of Capital. We argue that the long-run dynamic adjustment proposed by Kaleckian scholars lacks a coherent economic rationale, and provide an alternative path toward the endogeneity of the desired utilization at the micro and macro levels. Finally, we examine the proposed adjustment mechanism econometrically. Our results verify the endogeneity of the normal utilization rate.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Shapiro, Matthew D, 1986.
"Capital Utilization and Capital Accumulation: Theory and Evidence,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 1(3), pages 211-234, July.
- Matthew D. Shapiro, 1985. "Capital Utilization and Capital Accumulation: Theory and Evidence," Cowles Foundation Discussion Papers 736, Cowles Foundation for Research in Economics, Yale University.
- Matthew D. Shapiro, 1986. "Capital Utilization and Capital Accumulation: Theory and Evidence," NBER Working Papers 1900, National Bureau of Economic Research, Inc.
- Michalis Nikiforos, 2013. "The (Normal) Rate of Capacity Utilization at the Firm Level," Metroeconomica, Wiley Blackwell, vol. 64(3), pages 513-538, 07.
- Michalis Nikiforos, 2012. "The (Normal) Rate of Capacity Utilization at the Firm Level," Economics Working Paper Archive wp_737, Levy Economics Institute.
- Antoine Bonleu & Gilbert Cette & Guillaume Horny, 2013. "Capital utilization and retirement," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3483-3494, August.
- Bonleu, A. & Cette, G. & Horny, G., 2011. "Capital Utilisation and Retirement," Working papers 343, Banque de France.
- Antoine Bonleu & Gilbert Cette & Guillaume Horny, 2013. "Capital utilization and retirement," Post-Print hal-01500866, HAL.
- Antoine Bonleu & Gilbert Cette & Guillaume Horny, 2011. "Capital Utilisation and Retirement," Working Papers halshs-00635477, HAL.
- Lavoie, Marc, 1995. "The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques," Cambridge Journal of Economics, Oxford University Press, vol. 19(6), pages 789-818, December.
- Lavoie, M., 1992. "The Kaleckian Model of Growth and Distribution and its Neo-Ricardian and Neo-Marxian Critiques," Working Papers 9201e, University of Ottawa, Department of Economics.
- Winston, Gordon C, 1974. "The Theory of Capital Utilization and Idleness," Journal of Economic Literature, American Economic Association, vol. 12(4), pages 1301-1320, December.
- Berndt, Ernst R & Morrison, Catherine J, 1981. "Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach," American Economic Review, American Economic Association, vol. 71(2), pages 48-52, May.
- Betancourt,Roger R. & Clague,Christopher K., 2008. "Capital Utilization," Cambridge Books, Cambridge University Press, number 9780521070287, August.
- Catherine J. Morrison, 1985. "On the Economic Interpretation and Measurement of Optimal Capacity Utilization with Anticipatory Expectations," Review of Economic Studies, Oxford University Press, vol. 52(2), pages 295-309.
- Catherine J. Morrison, 1985. "On the Economic Interpretation and Measurement of Optimal Capacity Utilization with Anticipatory Expectations," NBER Working Papers 1536, National Bureau of Economic Research, Inc.
- 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.
- Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
- Norman J. Morin & John J. Stevens, 2004. "Estimating capacity utilization from survey data," Finance and Economics Discussion Series 2004-49, Board of Governors of the Federal Reserve System (U.S.).
- Michalis Nikiforos & Duncan K. Foley, 2012. "Distribution And Capacity Utilization: Conceptual Issues And Empirical Evidence," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 200-229, 02.
- 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, 02.
- Lawrence R. Klein, 1958. "The Measurement of Capacity," Cowles Foundation Discussion Papers 49, Cowles Foundation for Research in Economics, Yale University. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_739. 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: (Marie-Celeste Edwards)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 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.