Hysteresis in the normal rate of capacity utilization: a behavioural explanation
Author
Abstract
Suggested Citation
Download full text from publisher
Other versions of this item:
- Mark Setterfield & Joana David Avritzer, 2020. "Hysteresis in the normal rate of capacity utilization: A behavioral explanation," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 898-919, November.
References listed on IDEAS
- Robert A. Blecker, 2016.
"Wage-led versus profit-led demand regimes: the long and the short of it,"
Review of Keynesian Economics, Edward Elgar Publishing, vol. 4(4), pages 373-390, October.
- Robert A. Blecker, 2015. "Wage-led Versus Profit-led Demand Regimes: The Long and Short of It," Working Papers 2015-05, American University, Department of Economics.
- Marc Lavoie & Gabriel Rodriguez & Mario Seccareccia, 2004. "Similitudes and Discrepancies in Post-Keynesian and Marxist Theories of Investment: A Theoretical and Empirical Investigation," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 127-149.
- Michalis Nikiforos, 2013.
"The (Normal) Rate of Capacity Utilization at the Firm Level,"
Metroeconomica, Wiley Blackwell, vol. 64(3), pages 513-538, July.
- Michalis Nikiforos, 2012. "The (Normal) Rate of Capacity Utilization at the Firm Level," Economics Working Paper Archive wp_737, Levy Economics Institute.
- Lavoie, Marc, 1995.
"The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques,"
Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(6), pages 789-818, December.
- Lavoie, M., 1992. "The Kaleckian Model of Growth and Distribution and its Neo-Ricardian and Neo-Marxian Critiques," Working Papers 9201e, University of Ottawa, Department of Economics.
- Marc Lavoie, 1996. "Traverse, Hysteresis, and Normal Rates of Capacity Utilization in Kaleckian Models of Growth and Distribution," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(4), pages 113-147, December.
- Marc Lavoie, 2002. "The Kaleckian Growth Model with Target Return Pricing and Conflict Inflation," Chapters, in: Mark Setterfield (ed.), The Economics of Demand-Led Growth, chapter 10, Edward Elgar Publishing.
- Peter Skott, 2012.
"Theoretical And Empirical Shortcomings Of The Kaleckian Investment Function,"
Metroeconomica, Wiley Blackwell, vol. 63(1), pages 109-138, February.
- Peter Skott, 2008. "Theoretical and empirical shortcomings of the Kaleckian investment function," UMASS Amherst Economics Working Papers 2008-11, University of Massachusetts Amherst, Department of Economics, revised Dec 2009.
- Michalis Nikiforos, 2016. "On the ‘utilisation controversy’: a theoretical and empirical discussion of the Kaleckian model of growth and distribution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(2), pages 437-467.
- Edward Amadeo, 1987. "Expectations in a steady state model of capacity utilization," Textos para discussão 169, Department of Economics PUC-Rio (Brazil).
- Dany Lang, 2008.
"Why Economists should Choose their Inheritance: Physics and Path-independence in Economic Systems,"
Review of Political Economy, Taylor & Francis Journals, vol. 20(3), pages 405-420.
- Dany Lang, 2008. "Why Economists should Choose their Inheritance: Physics and Path-independence in Economic Systems," Post-Print hal-01366016, HAL.
- Joana David Avritzer, 2020. "Estimation of a long run regime for growth and demand through different filtering methods," Working Papers 2004, New School for Social Research, Department of Economics, revised Oct 2020.
- James D. Hamilton, 2018. "Why You Should Never Use the Hodrick-Prescott Filter," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 831-843, December.
- Kyle Jurado & Sydney C. Ludvigson & Serena Ng, 2015.
"Measuring Uncertainty,"
American Economic Review, American Economic Association, vol. 105(3), pages 1177-1216, March.
- Kyle Jurado & Sydney C. Ludvigson & Serena Ng, 2013. "Measuring Uncertainty," NBER Working Papers 19456, National Bureau of Economic Research, Inc.
- Marc Lavoie, 2016.
"Convergence Towards the Normal Rate of Capacity Utilization in Neo-Kaleckian Models: The Role of Non-Capacity Creating Autonomous Expenditures,"
Metroeconomica, Wiley Blackwell, vol. 67(1), pages 172-201, February.
- Marc Lavoie, 2016. "Convergence towards the normal rate of capacity utilization in neo-Kaleckian models: the role of non-capacity creating autonomous expenditures," Post-Print hal-01343732, HAL.
- Fabio Freitas & Franklin Serrano, 2015. "Growth Rate and Level Effects, the Stability of the Adjustment of Capacity to Demand and the Sraffian Supermultiplier," Review of Political Economy, Taylor & Francis Journals, vol. 27(3), pages 258-281, July.
- Robert Guttmann, 2015.
"The heterodox notion of structural crisis,"
Review of Keynesian Economics, Edward Elgar Publishing, vol. 3(2), pages 194-212, April.
- Robert Guttmann, 2015. "The heterodox notion of structural crisis," Post-Print hal-01345508, HAL.
- Mario Cassetti, 2006. "A note on the long-run behaviour of Kaleckian models," Review of Political Economy, Taylor & Francis Journals, vol. 18(4), pages 497-508.
- Mark Setterfield, 2019. "Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte," Working Papers 1905, New School for Social Research, Department of Economics.
- Eckhard Hein & Marc Lavoie & Till van Treeck, 2012. "Harrodian Instability And The ‘Normal Rate’ Of Capacity Utilization In Kaleckian Models Of Distribution And Growth—A Survey," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 139-169, February.
- Mark Setterfield, 2019.
"Long-run variation in capacity utilization in the presence of a fixed normal rate,"
Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 443-463.
- Mark Setterfield, 2017. "Long-run variation in capacity utilization in the presence of a fixed normal rate," Working Papers 1704, New School for Social Research, Department of Economics.
- Gérard Duménil & Dominique Lévy, 1999. "Being Keynesian in the Short Term and Classical in the Long Term: The Traverse to Classical Long‐Term Equilibrium," Manchester School, University of Manchester, vol. 67(6), pages 684-716, December.
- Kurz, Heinz D, 1990. "Effective Demand, Employment and Capital Utilisation in the Short Run," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 14(2), pages 205-217, June.
- Christian Schoder, 2012.
"Hysteresis In The Kaleckian Growth Model: A Bayesian Analysis For The Us Manufacturing Sector From 1984 To 2007,"
Metroeconomica, Wiley Blackwell, vol. 63(3), pages 542-568, July.
- Christian Schoder, 2012. "Hysteresis in the Kaleckian growth model: a Bayesian analysis for the US manufacturing sector from 1984 to 2007," Working Papers 1201, New School for Social Research, Department of Economics.
- Thomas Dallery & Till van Treeck, 2011.
"Conflicting Claims and Equilibrium Adjustment Processes in a Stock-flow Consistent Macroeconomic Model,"
Review of Political Economy, Taylor & Francis Journals, vol. 23(2), pages 189-211, April.
- Thomas Dallery & Till van Treeck, 2011. "Conflicting Claims and Equilibrium Adjustment Processes in a Stock-flow Consistent Macroeconomic Model," Post-Print hal-04159096, HAL.
- Harcourt,G. C., 1972.
"Some Cambridge Controversies in the Theory of Capital,"
Cambridge Books,
Cambridge University Press, number 9780521096720, September.
- Harcourt, G C, 1969. "Some Cambridge Controversies in the Theory of Capital," Journal of Economic Literature, American Economic Association, vol. 7(2), pages 369-405, June.
- Anwar Shaikh, 2009. "Economic Policy In A Growth Context: A Classical Synthesis Of Keynes And Harrod," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 455-494, July.
- Cross, Rod, 1993. "On the Foundations of Hysteresis in Economic Systems," Economics and Philosophy, Cambridge University Press, vol. 9(1), pages 53-74, April.
- Mathias Drehmann & James Yetman, 2018. "Why you should use the Hodrick-Prescott filter - at least to generate credit gaps," BIS Working Papers 744, Bank for International Settlements.
- Marc Lavoie, 1992. "Foundations of Post-Keynesian Economic Analysis," Books, Edward Elgar Publishing, number 275.
- 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.
- Eckhard Hein & Marc Lavoie & Till van Treeck, 2008. "Some instability puzzles in Kaleckian models of growth and distribution: A critical survey," IMK Working Paper 19-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Neri Salvadori & Carlo Panico (ed.), 2006. "Classical, Neoclassical and Keynesian Views on Growth and Distribution," Books, Edward Elgar Publishing, number 3797.
- Amable, Bruno & Henry, Jerome & Lordon, Frederic & Topol, Richard, 1994. "Strong hysteresis versus zero-root dynamics," Economics Letters, Elsevier, vol. 44(1-2), pages 43-47.
- Marc Lavoie, 2003. "Kaleckian Effective Demand and Sraffian Normal Prices: Towards a reconciliation," Review of Political Economy, Taylor & Francis Journals, vol. 15(1), pages 53-74.
- Bruno Amable & Jérôme Henry & Frédéric Lordon & Richard Topol, 1993. "Unit Root in the Wage-Price Spiral Is Not Hysteresis in Unemployment," Journal of Economic Studies, Emerald Group Publishing, vol. 20(1/2), pages 123-135, January.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Lorenzo Di Domenico, 2021. "Multiplicity and not necessarily heterogeneity: implications for the long-run degree of capacity utilization," Working Papers PKWP2116, Post Keynesian Economics Society (PKES).
- Santiago J. Gahn, 2022. "Towards an explanation of a declining trend in capacity utilisation in the US economy," Working Papers PKWP2214, Post Keynesian Economics Society (PKES).
- Bassi, Federico & Bauermann, Tom & Lang, Dany & Setterfield, Mark, 2022.
"Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization,"
Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 196-212.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach tomodeling hysteresis in the normal rate of capacity utilization," Working Papers halshs-02865532, HAL.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization," Working Papers 2007, New School for Social Research, Department of Economics, revised Aug 2021.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2022. "Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization," Post-Print hal-04442394, HAL.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization," FMM Working Paper 56-2020, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach tomodeling hysteresis in the normal rate of capacity utilization," CEPN Working Papers halshs-02865532, HAL.
- Santiago J. Gahn, 2020. "Is there a decreasing trend in capacity utilisation in the US economy? Some new evidence," Working Papers PKWP2006, Post Keynesian Economics Society (PKES).
- Daniele Tavani & Luke Petach, 2021.
"Firm beliefs and long-run demand effects in a labor-constrained model of growth and distribution,"
Journal of Evolutionary Economics, Springer, vol. 31(2), pages 353-377, April.
- Daniele Tavani & Luke Petach, 2019. "Firm beliefs and long-run demand effects in a labor-constrained model of growth and distribution," Working Papers PKWP1903, Post Keynesian Economics Society (PKES).
- Mark Setterfield, 2019. "Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte," Working Papers 1905, New School for Social Research, Department of Economics.
- Michalis Nikiforos, 2023. "Notes on the accumulation and utilization of capital: Some theoretical issues," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 223-247, February.
- Zachary Knauss, 2024. "Exploring the Profit-Investment Puzzle: A Post-Keynesian Analysis of Market Concentration and Stagnation," Working Papers 2409, New School for Social Research, Department of Economics.
- Guilherme Haluska & Julia Braga & Ricardo Summa, 2021. "Growth, investment share and the stability of the Sraffian Supermultiplier model in the U.S. economy (1985–2017)," Metroeconomica, Wiley Blackwell, vol. 72(2), pages 345-364, May.
- Mark Setterfield, 2021. "Harrodians and Kaleckians: a suggested reconciliation and synthesis," Working Papers 2111, New School for Social Research, Department of Economics, revised Jan 2022.
- Michalis Nikiforos, 2021. "Notes on the accumulation and utilization of capital: Some empirical issues," Metroeconomica, Wiley Blackwell, vol. 72(4), pages 679-695, November.
- de Oliveira, Guilherme, 2023. "On the utilization controversy in the demand-led growth literature: A quantile unit root approach," Economic Modelling, Elsevier, vol. 126(C).
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Bassi, Federico & Bauermann, Tom & Lang, Dany & Setterfield, Mark, 2022.
"Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization,"
Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 196-212.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach tomodeling hysteresis in the normal rate of capacity utilization," Working Papers halshs-02865532, HAL.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization," FMM Working Paper 56-2020, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2022. "Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization," Post-Print hal-04442394, HAL.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach to modeling hysteresis in the normal rate of capacity utilization," Working Papers 2007, New School for Social Research, Department of Economics, revised Aug 2021.
- Federico Bassi & Tom Bauermann & Dany Lang & Mark Setterfield, 2020. "Is capacity utilization variable in the long run? An agent-based sectoral approach tomodeling hysteresis in the normal rate of capacity utilization," CEPN Working Papers halshs-02865532, HAL.
- Eckhard Hein, 2019. "Harrodian instability in Kaleckian models and Steindlian solutions," FMM Working Paper 46-2019, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Mark Setterfield, 2019.
"Long-run variation in capacity utilization in the presence of a fixed normal rate,"
Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 443-463.
- Mark Setterfield, 2017. "Long-run variation in capacity utilization in the presence of a fixed normal rate," Working Papers 1704, New School for Social Research, Department of Economics.
- Gahn, Santiago José, 2021. "On the adjustment of capacity utilisation to aggregate demand: Revisiting an old Sraffian critique to the Neo-Kaleckian model," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 325-360.
- Sasaki, Hiroaki, 2012.
"Is the long-run equilibrium wage-led or profit-led? A Kaleckian approach,"
Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 231-244.
- Hiroaki Sasaki, 2011. "Is the Long-run Equilibrium Wage-led or Profit-led? A Kaleckian Approach," Discussion papers e-11-002, Graduate School of Economics Project Center, Kyoto University.
- Christian Schoder, 2012.
"Effective demand, exogenous normal utilization and endogenous capacity in the long run. Evidence from a CVAR analysis for the US,"
IMK Working Paper
103-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Christian Schoder, 2013. "Effective demand, exogenous normal utilization and endogenous capacity in the long run. Evidence from a CVAR analysis for the US," Working Papers 1306, New School for Social Research, Department of Economics.
- Eckhard Hein, 2017.
"Post-Keynesian macroeconomics since the mid 1990s: main developments,"
European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 14(2), pages 131-172, September.
- Hein, Eckhard, 2016. "Post-Keynesian macroeconomics since the mid-1990s: Main developments," IPE Working Papers 75/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
- Eckhard Hein, 2017. "Post-Keynesian macroeconomics since the mid-1990s - main developments," FMM Working Paper 01-2017, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Daniele Girardi & Riccardo Pariboni, 2019.
"Normal utilization as the adjusting variable in Neo‐Kaleckian growth models: A critique,"
Metroeconomica, Wiley Blackwell, vol. 70(2), pages 341-358, May.
- Daniele Girardi & Riccardo Pariboni, 2018. "Normal utilization as the adjusting variable in Neo-Kaleckian growth models : a critique," UMASS Amherst Economics Working Papers 2018-11, University of Massachusetts Amherst, Department of Economics.
- Mark Setterfield, 2019. "Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte," Working Papers 1905, New School for Social Research, Department of Economics.
- 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.
- Eckhard Hein & Marc Lavoie & Till van Treeck, 2008. "Some instability puzzles in Kaleckian models of growth and distribution: A critical survey," IMK Working Paper 19-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Eckhard Hein, 2016.
"Secular stagnation or stagnation policy? Steindl after Summers,"
PSL Quarterly Review, Economia civile, vol. 69(276), pages 3-47.
- Eckhard Hein, 2015. "Secular Stagnation or Stagnation Policy? Steindl after Summers," Economics Working Paper Archive wp_846, Levy Economics Institute.
- Santiago José Gahn & Alejandro González, 2022.
"On the empirical content of the convergence debate: Cross‐country evidence on growth and capacity utilisation,"
Metroeconomica, Wiley Blackwell, vol. 73(3), pages 825-855, July.
- Santiago J. Gahn & Alejandro González, 2019. "On the empirical content of the convergence debate: Cross country evidence on growth and capacity utilisation," Working Papers PKWP1922, Post Keynesian Economics Society (PKES).
- Christian Schoder, 2012. "Instability, stationary utilization and effective demand: A synthesis of Harrodian and Kaleckian growth theory," IMK Working Paper 104-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Florian Botte, 2017. "Estimating normal capacity utilization rates and their tolerable ranges of values: A comment on Setterfield," Post-Print hal-01543643, HAL.
- Lorenzo Di Domenico, 2021. "Multiplicity and not necessarily heterogeneity: implications for the long-run degree of capacity utilization," Working Papers PKWP2116, Post Keynesian Economics Society (PKES).
- Ettore Gallo & Maria Cristina Barbieri Góes, 2023.
"Investment, autonomous demand and long-run capacity utilization: an empirical test for the Euro Area,"
Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 225-255, April.
- Ettore Gallo, 2019. "Investment, Autonomous Demand and Long Run Capacity Utilization: An Empirical Test for the Euro Area," Working Papers 1904, New School for Social Research, Department of Economics.
- Gallo, Ettore, 2019. "Investment, autonomous demand and long run capacity utilization: An empirical test for the Euro Area," IPE Working Papers 116/2019, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
- Hein, Eckhard, 2016. "The Bhaduri/Marglin post-Kaleckian model in the history of distribution and growth theories: An assessment by means of model closures," IPE Working Papers 66/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
- Christian Schoder, 2012. "Endogenous capital productivity in the Kaleckian growth model. Theory and Evidence," IMK Working Paper 102-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
- Christian Schoder, 2014. "Effective Demand, Exogenous Normal Utilization and Endogenous Capacity in the Long Run: Evidence from a Cointegrated Vector Autoregression Analysis for the USA," Metroeconomica, Wiley Blackwell, vol. 65(2), pages 298-320, May.
- Schoder, Christian, 2014. "Instability, stationary utilization and effective demand: A structuralist model of endogenous cycles," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 10-29.
More about this item
Keywords
Normal rate of capacity utilization; Harrodian instability; hysteresis; Kaleckian growth theory;All these keywords.
JEL classification:
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
- O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
NEP fields
This paper has been announced in the following NEP Reports:- NEP-GRO-2019-06-17 (Economic Growth)
- NEP-MAC-2019-06-17 (Macroeconomics)
- NEP-PKE-2019-06-17 (Post Keynesian Economics)
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:new:wpaper:1907. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mark Setterfield (email available below). General contact details of provider: https://edirc.repec.org/data/denewus.html .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.