Arbeitspapier
Interest, debt and capital accumulation - a Kaleckian approach
In the present paper we explicitly introduce interest payments and debt into a Kaleckian distribution and growth model with an investment function very close to Kalecki's original writings. The effects of interest rate variations on the short-run equilibrium values of capacity utilisation, capital accumulation and the rate of profit are derived, and the long run effects on the equilibrium debt-capital-ratio are also analysed. It is shown, that the effects of interest variations on the endogenously determined equilibrium values of the model do not only depend on the parameter values in the saving and investment functions but also on the interest elasticity of distribution and in some cases on initial conditions with respect to the interest rate and the debt-capital-ratio. If the conditions for short-run normal' effects of interest rate variations are given, the economy will be characterised by a long-run unstable debt-capital-ratio and by the macroeconomic paradox of debt'. These results are similar to other models and hint to the robustness of Kaleckian monetary' models of distribution and growth with respect to the specification of the investment function.
- Language
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Englisch
- Bibliographic citation
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Series: IMK Working Paper ; No. 5/2005
- Classification
-
Wirtschaft
General Aggregative Models: Keynes; Keynesian; Post-Keynesian
Investment; Capital; Intangible Capital; Capacity
Aggregate Factor Income Distribution
Financial Markets and the Macroeconomy
Monetary Growth Models
- Subject
-
Interest rate
debt
capital accumulation
Kaleckian model
- Event
-
Geistige Schöpfung
- (who)
-
Hein, Eckhard
- Event
-
Veröffentlichung
- (who)
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Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
- (where)
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Düsseldorf
- (when)
-
2005
- Handle
- URN
-
urn:nbn:de:101:1-2008081481
- Last update
-
2025-03-10T11:42:19+0100
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hein, Eckhard
- Hans-Böckler-Stiftung, Institut für Makroökonomie und Konjunkturforschung (IMK)
Time of origin
- 2005
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