A Dynamic Analysis of Demand and Productivity Growth in a Two-sector Kaleckian Model

Hiroshi Nishi

MPRA Paper from University Library of Munich, Germany

Abstract: This study extends a two-sector Kaleckian model of growth and income distribution by incorporating the dynamics of labour productivity growth. The economy is composed of investment goods and consumption goods producing sectors, with the sectoral demand and productivity growth interaction dynamically formalized. The study analyses the conditions for the cyclical demand and productivity growth phenomena in a two-sector economy. The model reveals that each sector may present a different response in capacity utilization rate to a change in sectoral income distribution. These phenomena are specific to two-sector models, and cannot be observed with a conventional aggregate growth model.

Keywords: Kaleckian model; Two-sector economy; Effective demand; Productivity growth (search for similar items in EconPapers)
JEL-codes: E25 E32 O41 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-mac and nep-pke
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:86778

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