Some instability puzzles in Kaleckian models of growth and distribution: a critical survey

Eckhard Hein, Marc Lavoie and Till van Treeck

Cambridge Journal of Economics, 2011, vol. 35, issue 3, 587-612

Abstract: We tackle the issue of the possible instability of the Kaleckian distribution and growth model. Distinguishing between Keynesian and Harrodian instability, we review various mechanisms that have been proposed by critics of the Kaleckian model to tame Harrodian instability while bringing back the rate of utilisation to its normal rate. We find that the mechanisms that have been suggested are far from convincing. Therefore, we conclude that it may be premature for the critics of the Kaleckian model to dismiss the endogeneity of the rate of capacity utilisation in long-run growth equilibrium. Copyright The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Date: 2011
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Working Paper: Some instability puzzles in Kaleckian models of growth and distribution: A critical survey (2008)
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