Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105904
Authors: 
Hein, Eckhard
Lavoie, Marc
van Treeck, Till
Year of Publication: 
2008
Series/Report no.: 
IMK Working Paper 19/2008
Abstract: 
We tackle the issue of the possible instability of the Kaleckian distribution and growth model and the consequences for the endogeneity of the equilibrium rate of capacity utilization and for the paradox of thrift and the paradox of costs. Distinguishing between Keynesian and Harrodian instability, we review various mechanisms that have been proposed to tame Harrodian instability while bringing back the rate of utilization to its normal rate. We find that the mechanisms that have been suggested are far from being convincing. We thus review some approaches arguing that the adjustment towards a predetermined normal rate should not be expected at all, either because the normal rate reacts to the actual rate, or because of other constraints on the behaviour of entrepreneurs. We conclude that Kaleckian models are more flexible than their Harrodian and Marxian critics suppose when attacking the simple textbook version.
Subjects: 
Kaleckian models
distribution
investment function
stability
utilization rate.
JEL: 
E12
E20
O41
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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