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The Neo-Pasinetti Theorem in Cambridge and Kaleckian Models of Growth and Distribution

Author

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  • Marc Lavoie

    (University of Ottawa)

Abstract

Kaldor's neo-Pasinetti theorem is examined in an economy where the rate of profit adjusts to higher effective demand through increases in the rate of capacity utilization rather than through increases in the margin of profit. A Tobinian investment function, where investment responds to the valuation ratio, is then introduced along with Kaleckian elements, investment depending also on the rate of utilization. It is shown that in such a modified model, the Keynesian-Kaleckian results are quite robust.

Suggested Citation

  • Marc Lavoie, 1998. "The Neo-Pasinetti Theorem in Cambridge and Kaleckian Models of Growth and Distribution," Eastern Economic Journal, Eastern Economic Association, vol. 24(4), pages 417-434, Fall.
    • Handle: RePEc:eej:eeconj:v:24:y:1998:i:4:p:417-434
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/eeconj/Volume24/V24N4P417_434.pdf
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    Citations

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    Cited by:

    1. Javier López Bernardo & Engelbert Stockhammer & Félix López Martínez, 2016. "A post Keynesian theory for Tobin’s in a stock-flow consistent framework," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 39(2), pages 256-285, April.
    2. Eckhard Hein, 2010. "Shareholder Value Orientation, Distribution And Growth—Short‐ And Medium‐Run Effects In A Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 61(2), pages 302-332, May.
    3. Eckhard Hein, 2009. "A (Post-) Keynesian perspective on "financialisation"," IMK Studies 01-2009, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    4. Javier López-Bernardo & Félix López-Martínez & Engelbert Stockhammer, 2016. "A Post-Keynesian Response to Piketty's ‘Fundamental Contradiction of Capitalism’," Review of Political Economy, Taylor & Francis Journals, vol. 28(2), pages 190-204, April.
    5. Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 587-612.
    6. Stefan Ederer & Miriam Rehm, 2021. "Wealth inequality and aggregate demand," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 405-424, May.
    7. Marc Lavoie & Wynne Godley, 2000. "Kaleckian Models of Growth in a Stock-Flow Monetary Framework: A Neo-Kaldorian Model," Macroeconomics 0004049, University Library of Munich, Germany.
    8. Eckhard Hein, 2012. "The Macroeconomics of Finance-Dominated Capitalism – and its Crisis," Books, Edward Elgar Publishing, number 14931.
    9. Alejandro Rodríguez Arana, 2015. "The share of wages in national income and its effects in the short and long run economic activity and growth," Working Papers 0215, Universidad Iberoamericana, Department of Economics.

    More about this item

    Keywords

    Distribution; Growth; Profits;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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