Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181479
Authors: 
Palley, Thomas
Year of Publication: 
2018
Series/Report no.: 
FMM Working Paper 21
Abstract: 
Post Keynesian (PK) growth models typically fail to model unemployment. That shows up in the absence of any equilibrium condition requiring the growth of employment equal effective labor supply growth. Consequently, the models can have an imploding or exploding unemployment rate. The underlying analytical problem is failure to resolve the Harrod (1939) knife edge problem. This paper shows how the knife-edge problem can be resolved via a Kaldor - Hicks technological progress function. The paper applies the concept to several different PK growth models. In the Harrod, super-multiplier, Cambridge, and neo-Kaleckian models the warranted rate rules the roost and natural rate forces have no impact on the equilibrium growth rate. However, in a modified neo-Kaleckian model with labor market distribution conflict both warranted rate and natural rate forces impact steady state growth.
Subjects: 
Growth
unemployment
Harrod Knife-edge
endogenous technical progress
Hicks
Kaldor
JEL: 
O4
O41
O33
E12
Document Type: 
Working Paper
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