 Reviving Kalecki’s business cycle model in a growth contextReiner Franke Journal of Economic Dynamics and Control, 2018, vol. 91, issue C, 157-171 Abstract: In 1935 Kalecki formulated the first fully specified model of a macroeconomic dynamics in which he studied an endogenous and most elementary business cycle mechanism. To revive his insights, the present paper adapts his stationary economy to a growth context. Introducing a reasonable nonlinearity into the investment function, it then takes care that the model exhibits persistent cyclical behaviour that is characterized by a unique, globally attracting limit cycle. This feature is a robust property. A calibration of the numerical parameters achieves desired values for the cycle period as well as the amplitudes of the output-capital ratio and the capital growth rate. It is moreover demonstrated that a one-time shock to the dynamics can easily have long-lasting effects on the amplitudes. Despite common misgivings about delay differential equations (which here result from Kalecki’s implementation lag), the analysis can be conducted with a limited mathematical effort. Keywords: Gestation period; Delay differential equations; Unique limit cycle; Calibration; Variations in the amplitude (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:91:y:2018:i:c:p:157-171 DOI: 10.1016/j.jedc.2017.12.009 Access Statistics for this article Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok More articles in Journal of Economic Dynamics and Control from Elsevier |
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