A Steindlian account of the distribution of corporate profits and leverage: A stock-flow consistent macroeconomic model with agent-based microfoundations

Jo Michell

No PKWP1412, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: Post Keynesian economics has largely forgotten Steindl's insight that monopolisation of the corporate sector redistributes profits to those firms least likely to invest them productively. Agent-based methods can be used to incorporate Steindl's insights into a simple stock- flow consistent model of the monetary circuit. This model illustrates the `maldistribution of profits' and `enforced indebtedness' of heterogeneous firms alongside the tendency towards stagnation that occurs with rising monopolisation. The model also demonstrates Minsky's assertion that firms' leverage rises over the business cycle can be reconciled with Kalecki's macroeconomic identities showing that profits are `financed' by the investment expenditures of firms.

Keywords: Stock-flow consistent; heterogeneous agents; post-Keynesian (search for similar items in EconPapers)
JEL-codes: C63 E16 E22 E25 E42 (search for similar items in EconPapers)
Pages: 30
Date: 2014-11
New Economics Papers: this item is included in nep-cmp, nep-hme and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:pke:wpaper:pkwp1412

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