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A multi-sector version of the Post-Keynesian growth model

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  • Araujo, Ricardo Azevedo
  • Teixeira, Joanílio Rodolpho

Abstract

With this inquiry we seek to develop a disaggregated version of the post-Keynesian approach to economic growth, by showing that indeed it can be treated as a particular case of the Pasinettian model of structural change and economic expansion. By relying upon vertical integration it becomes possible to carry out the analysis initiated by Kaldor (1956) and Robinson (1956, 1962), and followed by Dutt (1984), Rowthorn (1982) and later Bhaduri and Marglin (1990) in a multi-sectoral model in which demand and productivity increase at different paces in each sector. By adopting this approach it is possible to show that the structural economic dynamics is conditioned not only to patterns of evolving demand and diffusion of technological progress but also to the distributive features of the economy, which can give rise to different regimes of economic growth. Besides, we find it possible to determine the natural rate of profit that makes the mark-up rate to be constant over time.

Suggested Citation

  • Araujo, Ricardo Azevedo & Teixeira, Joanílio Rodolpho, 2011. "A multi-sector version of the Post-Keynesian growth model," MPRA Paper 30331, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:30331
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    References listed on IDEAS

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    1. Halevi, Joseph, 1996. "The significance of the theory of vertically integrated processes for the problem of economic development," Structural Change and Economic Dynamics, Elsevier, vol. 7(2), pages 163-171, June.
    2. Araujo, Ricardo Azevedo & Teixeira, Joanilio Rodolpho, 2002. "Structural change and decisions on investment allocation," Structural Change and Economic Dynamics, Elsevier, vol. 13(2), pages 249-258, June.
    3. Stockhammer, Engelbert, 1999. "Robinsonian and Kaleckian growth. An update on post-Keynesian growth theories," Department of Economics Working Paper Series 186, WU Vienna University of Economics and Business.
    4. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    5. 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.
    6. Taylor, Lance, 1985. "A Stagnationist Model of Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 9(4), pages 383-403, December.
    7. Roberto Scazzieri, 1990. "Vertical Integration in Economic Theory," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 13(1), pages 20-46, September.
    8. Eatwell, John, 1983. "The Long-Period Theory of Employment," Cambridge Journal of Economics, Oxford University Press, vol. 7(3-4), pages 269-285, September.
    9. Luigi L. Pasinetti, 2005. "The Cambridge School of Keynesian Economics," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 837-848, November.
    10. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
    11. Blecker, Robert A, 1989. "International Competition, Income Distribution and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 13(3), pages 395-412, September.
    12. Lavoie, Marc, 1997. "Pasinetti's Vertically Hyper-integrated Sectors and Natural Prices," Cambridge Journal of Economics, Oxford University Press, vol. 21(4), pages 453-467, July.
    13. M. Ruth & K. Donaghy & P. Kirshen, 2006. "Introduction," Chapters,in: Regional Climate Change and Variability, chapter 1 Edward Elgar Publishing.
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    Cited by:

    1. Donald A. R. George, 2013. "A two-sector growth model with institutional saving and investment," ESE Discussion Papers 214, Edinburgh School of Economics, University of Edinburgh.

    More about this item

    Keywords

    Post-Keynesian growth model; structural change; multi-sector models;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian

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