Kalecki's ceteris paribus Dynamics

Elizabeth Webster ()

Review of Political Economy, 1999, vol. 11, issue 1, 19-32

Abstract: Kalecki's macrodynamic models should be regarded as a form of ceteris paribus dynamics which follow through the logical consequences of given behavioural relationships taken in isolation from unrelated events. His models are not mechanistic but rather attempts to isolate the systematic forces within the economy. If we accept this, two important conclusions can be drawn from his models. First, we can see that it is not possible to stabilise the economy at any given level. Fluctuations are an inherent feature of the market economy. Secondly, the trend or centre of gravitation level of activity is determined by the level of exogenous expenditures such as the stable portion of capitalists' consumption, net exports and net government spending Artificially stimulating investment does not affect it. Only two behavioural postulates are required for these outcomes. Both may be justified given the context of market uncertainty.

Date: 1999
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DOI: 10.1080/095382599107156

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