Effective demand, investment and dynamics: The relevance of Kalecki for macroeconomic theory

Mario Luiz Possas

No 110, ZÖSS-Discussion Papers from University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS)

Abstract: Mainstream Macroeconomics has withdrawn completely from its remote origins in Keynes and Kalecki, replacing the principle of effective demand (P.E.D.) with supply economics, investment with savings, and dynamics with equilibrium as a norm This article discusses, in the event of Kalecki's centenary, the importance of his contribution for the reconstruction of a macroeconomic theory capable of (i) explaining, through P.E.D., the basic causal relations amongst economic variables without any reference to equilibrium; (ii) thus invalidating the false relevant role ascribed to savings; and (iii) bringing macrodynamics back to the core of the analysis of the capitalist economy.

Keywords: Macroeconomic dynamics; Kalecki; Effective demand; Investment and savings (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-his, nep-hme, nep-hpe, nep-mac and nep-pke
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cessdp:301870

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