Investment, Finance, Saving and Profits: A Kaleckian Approach to the Dynamic Circuit

A. Asimakopulos

Chapter 10 in Money and Production, 2024, pp 194-208 from Edward Elgar Publishing

Abstract: There are important similarities between the treatments of finance and investment by Kalecki and Keynes and by French economists who have examined ‘le circuit dynamique’. These economists emphasize the independence of investment from saving, and the key role of the banking system in making available the short-term credits that make it possible for firms to increase investment. But there could be situations where the availability of short-term credits cannot lead to an increase in investment, because the firms prefer a long-term financing for the construction of plant and equipment even when short-term credit conditions are easy. This happens, for instance, during periods of inflationary pressures.

Keywords: Economics and Finance (search for similar items in EconPapers)
Date: 2024
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