Corporate Debt, Rentiers' Portfolio Dynamics, Instability and Growth: A neo-Kaleckian Perspective

Pintu Parui

MPRA Paper from University Library of Munich, Germany

Abstract: Considering a stock-flow consistent neo-Kaleckian macro-model, along with firms' debt dynamics, in the long-run, we incorporate portfolio dynamics of rentiers and investigate the possibility of multiple equilibria and dynamic stability of the economy. Both the debt-led and the debt-burdened demand and growth regimes are possible. We find share buybacks, under certain conditions, not only may lead to the deterioration of the equilibrium rate of capital accumulation in the long-run but may potentially destabilize the entire economy. A strictly regulated financial market is desirable, as otherwise, the economy may lose its stability and produces the limit cycles.

Keywords: Capital Accumulation; Kaleckian Model; Stock-flow Consistency; Instability; Limit Cycle (search for similar items in EconPapers)
JEL-codes: C62 E12 E32 E44 O41 (search for similar items in EconPapers)
Date: 2020-09-11
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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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:102870

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