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Corporate Debt, Endogenous Dividend Rate, Instability and Growth

Pintu Parui

MPRA Paper from University Library of Munich, Germany

Abstract: In a stock-flow consistent neo-Kaleckian growth-model, we endogenize the dividend rate and debt-level in the long run and investigate the possibility of multiple equilibria and instability in the economy. We find that the economy is in a wage-led demand and debt-burdened growth regime. However, both debt-led and debt-burdened demand regimes are possible. In some instances, the speed of the adjustment parameter related to the dividend dynamics plays a crucial role in stabilizing the economy. Otherwise, the economy may lose its stability and gives birth to limit cycles. A significant rise in the interest rate may cause instability in the economy.

Keywords: Capital Accumulation; Dividend Rate; Kaleckian Model; Instability; Limit Cycle (search for similar items in EconPapers)
JEL-codes: C62 E12 O41 (search for similar items in EconPapers)
Date: 2020-09-02
New Economics Papers: this item is included in nep-cfn, nep-fdg, nep-gro, nep-mac, nep-ore and nep-pke
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Journal Article: Corporate debt, endogenous dividend rate, instability and growth (2022) Downloads
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