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A Dynamic Analysis of Demand and Productivity Growth in a Two-sector Kaleckian Model


  • Nishi, Hiroshi


This study extends a two-sector Kaleckian model of growth and income distribution by incorporating the dynamics of labour productivity growth. The economy is composed of investment goods and consumption goods producing sectors, with the sectoral demand and productivity growth interaction dynamically formalized. The study analyses the conditions for the cyclical demand and productivity growth phenomena in a two-sector economy. The model reveals that each sector may present a different response in capacity utilization rate to a change in sectoral income distribution. These phenomena are specific to two-sector models, and cannot be observed with a conventional aggregate growth model.

Suggested Citation

  • Nishi, Hiroshi, 2018. "A Dynamic Analysis of Demand and Productivity Growth in a Two-sector Kaleckian Model," MPRA Paper 86778, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:86778

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    References listed on IDEAS

    1. Reiner Franke, 2000. "Optimal Utilization of Capital and a Financial Sector in a Classical Gravitation Process," Metroeconomica, Wiley Blackwell, vol. 51(1), pages 40-66, February.
    2. 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.
    3. Marc Lavoie, 2014. "Post-Keynesian Economics: New Foundations," Post-Print hal-01343652, HAL.
    4. Ozlem Onaran & Thomas Obst, 2016. "Wage-led growth in the EU15 member-states: the effects of income distribution on growth, investment, trade balance and inflation," Cambridge Journal of Economics, Oxford University Press, vol. 40(6), pages 1517-1551.
    5. repec:bla:metroe:v:69:y:2018:i:2:p:444-472 is not listed on IDEAS
    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. Hiroaki Sasaki & Ryunosuke Sonoda & Shinya Fujita, 2013. "International Competition and Distributive Class Conflict in an Open Economy Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 64(4), pages 683-715, November.
    8. Park, Man-Seop, 1997. "Accumulation, Capacity Utilisation and Distribution," Contributions to Political Economy, Oxford University Press, vol. 16(0), pages 87-101.
    9. Eckhard Hein & Engelbert Stockhammer (ed.), 2011. "A Modern Guide to Keynesian Macroeconomics and Economic Policies," Books, Edward Elgar Publishing, number 13962, November.
    10. Shinya Fujita, 2015. "Mark-up Pricing, Sectoral Dynamics, and the Traverse Process in a Two-Sector Kaleckian Economy," Discussion papers e-15-005, Graduate School of Economics Project Center, Kyoto University.
    11. Storm, Servaas & Naastepad, C. W. M., 2012. "Macroeconomics Beyond the NAIRU," Economics Books, Harvard University Press, number 9780674062276, December.
    12. Marc Lavoie & Stockhammer Engelbert, 2013. "Wage-Led Growth: An Equitable Strategy for Economic Recovery," Post-Print hal-01343664, HAL.
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    Cited by:

    1. Clara Brenck & Laura Carvalho, 2019. "The equalizing spiral in early 21st century Brazil: a Kaleckian model with sectoral heterogeneity," Working Papers, Department of Economics 2019_30, University of São Paulo (FEA-USP).

    More about this item


    Kaleckian model; Two-sector economy; Effective demand; Productivity growth;

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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