Growth, income distribution and autonomous public expenditures

Olivier Allain ()

European Journal of Economic and Social Systems, 2012, vol. 25, issue 1-2, 59-72

Abstract: This article presents a Kaleckian model which is enriched by introducing autonomous public expenditures growing at an exogenous rate. We show that the usual properties are not affected in the short run: an increase in the profit share thus causes a decrease in the rate of capital accumulation (growth is wage-led). But long run properties are strongly affected: public expenditures play a role of automatic stabilizer such that accumulation rate converges toward the growth rate of public expenditures. The effect of a change in income distribution on the growth rate is then only transient. However, the impacts on the variables in level (output, capital stock, labor…) remain permanent.

Keywords: Kaleckian models; economic growth; income distribution; public expenditures; Automatic stabilizers (search for similar items in EconPapers)
Date: 2012
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Working Paper: Growth, income distribution and autonomous public expenditures (2012)
Working Paper: Growth, income distribution and autonomous public expenditures (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ejessy:0019

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