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Post‐Keynesian Effective Demand And Capital–Labour Substitution

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  • Takashi Ohno

Abstract

This paper analyses the relationship between the real wage rate and employment when we induce capital–labour substitution within a Post‐Keynesian Kaleckian model. To avoid the over‐determinacy problem, we consider a non‐homogeneous production function and cost minimization, in contrast to recent work that assumed a homogeneous production function and profit maximization. As a result, we find not only that increasing returns to scale are important in sustaining the long‐run stability condition, but also that if the increasing returns to scale are small, then it is more likely that employment will increase.

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  • Takashi Ohno, 2009. "Post‐Keynesian Effective Demand And Capital–Labour Substitution," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 525-536, July.
    • Handle: RePEc:bla:metroe:v:60:y:2009:i:3:p:525-536
    DOI: 10.1111/j.1467-999X.2008.00354.x
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    References listed on IDEAS

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    Cited by:

    1. Sasaki, Hiroaki, 2018. "タイトル：カレツキアン・モデルの基本骨格――短期モデルと長期モデル―― [The Basic Framework of the Kaleckian Model of Growth and Distribution: Short-run Model and Long-run Model]," MPRA Paper 88986, University Library of Munich, Germany.

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