Reflections on neo-Kaleckian growth regimes: a Marxian reproduction perspective

Feng Zhao, Jiahe Tian and Yuchen Duan

China Political Economy, 2021, vol. 4, issue 2, 224-240

Abstract: Purpose - The neo-Kaleckian model follows the ideas of Marx, Keynes and Kalecki, that investment is a key influencing factor in the dynamics of the capitalist mode of production. Through the discussion of different forms of investment decision function, this paper constructs the analysis framework of wage-led and profit-led economic growth regimes. Design/methodology/approach - The model has become an important theoretical paradigm for current Western heterodox economists regarding the research on the impact of functional income distribution on economic growth, and it has a very large impact on both theoretical and empirical research. Starting from Marx's reproduction theory, this article discusses the theoretical shortcomings of the neo-Kaleckian growth regime model. Findings - This paper mainly focuses on three aspects: (1) the ideological legacy of “Smith's Dogma”; (2) neglecting the restrictions on income distribution from the organic composition of capital and the surplus value rate; (3) technological progress and the formation of a new long economic wave. Originality/value - The authors believe that the neo-Kaleckian model unilaterally emphasizes the demand-side factors in the economy and, unconsciously or not, ignores the role of the supply-side, which makes it encounter certain limitations in explaining long-term growth. Even if some empirical conclusions are employed to bridge functional income distribution and technological progress, there is still a lack of a theoretical basis for accurately describing long-term economic changes using this model. In order to better promote high-quality economic development and accelerate the formation of a new pattern of economic development in which the domestic large-scale cycle is the mainstay and the domestic and international double cycles promote each other, the authors need to adopt a policy combination with the supply-side as the main and the demand-side as the supplement, and to work from both sides.

Keywords: Neo-Kaleckian model; Growth regime; Income distribution; Reproduction (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:cpepps:cpe-11-2021-0017

DOI: 10.1108/CPE-11-2021-0017

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