Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/105968 
Year of Publication: 
2012
Series/Report no.: 
IMK Working Paper No. 102
Publisher: 
Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK), Düsseldorf
Abstract: 
An endogenous, pro-cyclical capital productivity is motivated by optimizing firm behavior and estimated for a panel of US industries. A positive and significant adjustment parameter has been found relating the growth rate of capital productivity to the difference between the realized utilization rate and the target rate. The endogenous capital productivity is then introduced to a simple Kaleckian growth model with constant rate of utilization in the long run. The effects of shocks to investment, consumption and distribution are studied. We show that the paradox of thrift and the paradox of cost may only hold if Harrodian instability is introduced accompanied by stabilizing counter-forces such as debt dynamics.
Subjects: 
Kaleckian growth model
effective demand
stationary utilization rate
endogenous capital productivity
panel estimation
JEL: 
E12
E22
C22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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