A post-Kaleckian econometric analysis of interest rates, income distribution, capacity utilization, accumulation and profit rates: the case of Italy

Ozan Ekin Kurt
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Ozan Ekin Kurt: N/A

European Journal of Economics and Economic Policies: Intervention, 2024, vol. 21, issue 3, 416-439

Abstract: The aim of this paper is to analyze the effects of interest rates on rates of capacity utilization, capital accumulation and profit in Italy within a post-Kaleckian theoretical framework. The model employed in the analysis, which was developed by Hein/Schoder (2011), is based on monetary- authority-controlled real long-term interest rates that affect the functional distribution of income. Interest rates directly and indirectly affect the equilibrium rates of capacity utilization, accumulation and profit at a given debt–capital ratio. Our findings based on two econometric methods revealed that a higher real long-term interest rate has an adverse effect on these three endogenous variables in the Italian economy.

Keywords: Interest rates; Monetary policy; Functional income distribution; Capacity utilization; Capital accumulation; Profit rates; Post-Keynesian economics (search for similar items in EconPapers)
JEL-codes: E12 E21 E22 E25 E43 (search for similar items in EconPapers)
Date: 2024
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