BBTopic6_08 - POST(NEO)-KEYNESIAN / CAMBRIDGE GROWTH THEORY...

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MAIN POINTS : Variation in income distribution adjusts saving in line with investment in the long-run Post-Keynesian growth theory as a theory of income distribution Post-Keynesian growth theory as a way around Harrod’s uniqueness problem Modern post-Keynesian/Kaleckian models of growth POST(NEO)-KEYNESIAN / CAMBRIDGE GROWTH THEORY AND MODERN POST- KEYNESIAN / KALECKIAN MODELS
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For Harrod v s g w = K Y Y S . = If g a < g w , K S = v s g a < v s K I a < ) ( K S K I a < ) ( For Solow-Swan, S determines I => K S ) K I ( a with line in adapts
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With income splitting into wages and profits only, aggregate saving is given by Robinson and Kaldor on saving, distribution and accumulation W s P s S w c . . + = Y W s Y P s s Y S w c . . + = = W P Y + = ( 29 Y P Y s Y P s s Y S w c - + = = . . ( 29 w w c s Y P s s s Y S + - = = . Since Y P s s Y P s w w c . . - + = ( 29 w w c s Y P s s + - = . ........ (5.2) ….(5.1) ....(5.3) ........ (5.4) => even with given s c and s w , aggregate s varies with P / Y
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In equilibrium ( 29 w w c s Y P s s s Y S Y I + - = = = . ( 29 ( 29 w c w w c s s s Y I s s Y P - - - = . 1 v g Y K K I Y I k . . = = ( 29 ( 29 w c w w w c s s s v g s s Y P - - - = . . 1 ........ (5.5) ........ (5.6) A given capital to output ratio => share of investment in output depends on the rate of accumulation ........ (5.7) ........ (5.8) With s w = 0, v g s Y P w c . . 1 = Y K g s w c . . 1 = ....(5.9)
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From (5.9) one can derive a relation between the equilibrium growth, capitalists’ propensity to consume and the rate of profit: Y K g s Y P w c . . 1
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BBTopic6_08 - POST(NEO)-KEYNESIAN / CAMBRIDGE GROWTH THEORY...

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