Mark-up Pricing, Sectoral Dynamics, and the Traverse Process in a Two-Sector Kaleckian Economy
Discussion papers from Graduate School of Economics Project Center, Kyoto University
Kaleckian models, which study the relation between functional income distribution and demand formation, have focused on how macro-level distribution affects macro-level performance. In the real economy, however, labour–management negotiations are held at the industry level and thus the relation between sectoral distribution and sectoral/macroeconomic performance should be considered. This study presents a two-sector Kaleckian model with intermediate inputs and investigates how a distributive change in one sector affects sectoral/macroeconomic capacity utilization and capital accumulation. The results of the presented comparative static analysis and traverse analysis demonstrate that one sector’s change in the mark-up rate shifts each sector’s rate of capacity utilization in the opposite direction, while the impact of one sector’s change in the mark-up rate on performance differs by sector. The analyses also demonstrate that the effect of a change in the mark-up rate on capital accumulation depends on the firm’s animal spirits.
Keywords: Two-sector model; Mark-up pricing; Traverse analysis (search for similar items in EconPapers)
JEL-codes: E12 E22 O41 (search for similar items in EconPapers)
Pages: 33 pages
New Economics Papers: this item is included in nep-ger, nep-mac and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:kue:dpaper:e-15-005
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