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The Rate of Interest in Kaleckian Models of Distribution and Growth

In: Money, Distribution Conflict and Capital Accumulation

Author

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  • Eckhard Hein

Abstract

The Kaleckian models of distribution and growth which build on the foundations of Kalecki (1954, 1971) and Steindl (1952) show the following characteristics:20 First, unlike the Kaldor-Robinson model, it is supposed that productive capacities in the industrial sector of the economy may not be fully utilized also in the long period. Unemployment and underutilization of capacity given by the capital stock are not only short-period but, rather, permanent features of capitalist economies. Secondly, with the technical conditions of production given and constant unit variable costs up to full capacity output, functional income distribution is determined by firms’ mark-up pricing in incompletely competitive goods markets. Thirdly, in complete agreement with the Kaldor-Robinson model, investment is viewed to be independent of saving also in the long period. But, contrary to the Kaldor-Robinson model, the adjustment of saving to investment is supposed to take place through output and growth, and not through redistribution between wages and profits.

Suggested Citation

  • Eckhard Hein, 2008. "The Rate of Interest in Kaleckian Models of Distribution and Growth," Palgrave Macmillan Books, in: Money, Distribution Conflict and Capital Accumulation, chapter 12, pages 87-99, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-59560-6_12
    DOI: 10.1057/9780230595606_12
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