Models of structural change and Kaldor’s facts: Critical survey from the Cambridge Keynesian perspective

Kazuhiro Kurose

Structural Change and Economic Dynamics, 2021, vol. 58, issue C, 267-277

Abstract: This study addresses the new research agenda of reconciling structural change with Kaldor’s facts. The mainstream economics interprets the facts as a state at which the economy grows along the generalised balanced growth path. Sectors in multi-sectoral models can be aggregated since the specific functions are used. The motions of aggregate variables can be described by the two-dimensional differential system of equations, as in Ramsey’s model, which has the uniquely (saddle-path) stable steady state. We argue that the mainstream strategy is far from Kaldor’s thoughts and has difficulty analysing structural change of heterogeneous capital. When the Cambridge Keynesian perspective based on Pasinetti’s structural dynamics is applied to the reconciliation, we can expect that structural change of heterogeneous capital can be analysed and the need of institutional changes must be followed by structural change to maintain full employment, whereas the mainstream reconciliation is achieved through the market mechanism.

Keywords: Structural change; Kaldor’s facts; Cambridge Keynesians; Pasinetti’s structural economic dynamics; Coordination through institutional changes (search for similar items in EconPapers)
JEL-codes: B24 E12 O14 O41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:58:y:2021:i:c:p:267-277

DOI: 10.1016/j.strueco.2021.05.010

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