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Notes on the Accumulation and Utilization of Capital: Some Theoretical Issues

Michalis Nikiforos

Economics Working Paper Archive from Levy Economics Institute

Abstract: This paper discusses some issues related to the triangle between capital accumulation, distribution, and capacity utilization. First, it explains why utilization is a crucial variable for the various theories of growth and distribution--more precisely, with regards to their ability to combine an autonomous role for demand (along Keynesian lines) and an institutionally determined distribution (along classical lines). Second, it responds to some recent criticism by Girardi and Pariboni (2019). I explain that their interpretation of the model in Nikiforos (2013) is misguided, and that the results of the model can be extended to the case of a monopolist. Third, it provides some concrete examples of why demand is a determinant for the long-run rate of utilization of capital. Finally, it argues that when it comes to the normal rate of utilization, it is the expected growth rate of demand that matters, not the level of demand.

Keywords: Accumulation; Growth; Distribution; Utilization (search for similar items in EconPapers)
JEL-codes: B22 D2 D3 O4 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-hme and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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