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Corporate Debt, Endogenous Dividend Rate, Instability and Growth

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  • Parui, Pintu

Abstract

In a stock-flow consistent neo-Kaleckian growth-model, we endogenize the dividend rate and debt-level in the long run and investigate the possibility of multiple equilibria and instability in the economy. We find that the economy is in a wage-led demand and debt-burdened growth regime. However, both debt-led and debt-burdened demand regimes are possible. In some instances, the speed of the adjustment parameter related to the dividend dynamics plays a crucial role in stabilizing the economy. Otherwise, the economy may lose its stability and gives birth to limit cycles. A significant rise in the interest rate may cause instability in the economy.

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  • Parui, Pintu, 2020. "Corporate Debt, Endogenous Dividend Rate, Instability and Growth," MPRA Paper 102724, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102724
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    Cited by:

    1. Pintu Parui, 2023. "Worker household debt, functional income distribution and growth: A neo‐Kaleckian perspective," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 446-476, May.
    2. Parui, Pintu, 2020. "Corporate Debt, Rentiers' Portfolio Dynamics, Instability and Growth: A neo-Kaleckian Perspective," MPRA Paper 102870, University Library of Munich, Germany.

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    More about this item

    Keywords

    Capital Accumulation; Dividend Rate; Kaleckian Model; Instability; Limit Cycle;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • 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

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