Finance, Financial Adjustments and Alternative Closures in Neo-Kaleckian Models: The Paradoxes of Thrift and Costs in the Long-Run

Brett Fiebiger

Review of Political Economy, 2024, vol. 36, issue 5, 1722-1745

Abstract: Heterodox economists debate if Keynesian/Kaleckian or Marxian/Harrodian results apply in the long-run. This paper explores different financial mechanisms in neo-Kaleckian models with the: (1) traditional closure of an endogenous utilisation rate; and, (2) supermultiplier closure where the utilisation rate is restored to its normal degree in the long-run. Keynesian/Kaleckian results are obtained regardless of the assumptions on the utilisation rate. Attention is also given to circuitist intra-period endogenous money financing relations, and to financial adjustments that increase the elasticity of household portfolio adjustments and firm liability-side management.

Date: 2024
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DOI: 10.1080/09538259.2024.2338403

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