Worker Household Debt, Functional Income Distribution and Growth: a neo-Kaleckian Perspective
MPRA Paper from University Library of Munich, Germany
In a stock-flow consistent neo-Kaleckian macro-model, along with worker households' debt dynamics, in the long-run, we incorporate distributional dynamics and demonstrate the possibility of multiple equilibria. Dynamic stability of the economy is also examined. Both debt-led and debt-burdened demand and growth regimes are possible in short-run as well as in the long-run. We find that mergers, acquisitions and hostile takeovers play a crucial role for (de)stabilizing the economy. In some instances, the speed of the adjustment parameter of the distributional dynamics becomes crucial for stabilizing the economy. Otherwise, the economy may lose its stability and gives birth to limit cycles.
Keywords: Capital Accumulation; Income Distribution; Worker Household Debt; Kaleckian Model; Limit Cycle; Stock-flow Consistency (search for similar items in EconPapers)
JEL-codes: C62 E12 E25 G34 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-fdg, nep-mac and nep-pke
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