Convergence of actual, warranted, and natural growth rates in a Kaleckian–Harrodian‐classical model

This paper describes a dynamic one‐sector macroeconomic model that draws on both post‐Keynesian and classical/neo‐Marxian themes. The model features an equilibrium in which Harrod’s actual, warranted, and natural growth rates coincide. Dynamic processes unfolding over both short and long time scales lead the economy to exhibit both business cycles and long waves. The Keynesian stability condition is assumed not to hold, so the model features short‐run instability, which is bounded from above by a utilization ceiling. Labor constraints affect distribution through conflict pricing. In contrast to other Kaleckian–Harrodian models, we do not assume an exogenous source of demand. Instead, short‐run instability is bounded from below by firms’ expectations that the downturn will eventually reverse.