A Kaleckian growth model with public capital and debt accumulation

Hiroshi Nishi and Kazuhiro Okuma

Metroeconomica, 2025, vol. 76, issue 2, 311-339

Abstract: We develop a three‐dimensional Kaleckian growth model that incorporates public capital, labour productivity growth, and government debt accumulation, and present three main findings. First, a positive labour productivity growth rate and the Domar condition are essential for a stable, steady state. Second, a proactive fiscal stance promotes economic growth and capital composition. Finally, in the wage‐led growth regime, a pro‐labour income distribution boosts economic growth and capital composition while reducing the government debt ratio, whereas in the profit‐led growth regime, a pro‐capital income distribution increases economic growth, capital composition, and the government debt ratio.

Date: 2025
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https://doi.org/10.1111/meca.12485

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Persistent link: https://EconPapers.repec.org/RePEc:bla:metroe:v:76:y:2025:i:2:p:311-339

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