A multi-sectoral version of the Post-Keynesian growth model

Abstract

With this inquiry, we seek to develop a disaggregated version of the post-Keynesian approach to economic growth, by showing that indeed it can be treated as a particular case of the Pasinettian model of structural change and economic expansion. By relying upon vertical integration it becomes possible to carry out the analysis initiated by Kaldor (1956) and Robinson (1956Robinson ( , 1962, and followed by Dutt (1984), Rowthorn (1982) and later Bhaduri and Marglin (1990) in a multi-sectoral model in which demand and productivity increase at different paces in each sector. By adopting this approach it is possible to show that the structural economic dynamics is conditioned not only to patterns of evolving demand and diffusion of technological progress but also to the distributive features of the economy, which can give rise to different regimes of economic growth. Besides, we find it possible to determine the natural rate of profit that makes the mark-up rate to be constant over time. KeywordsPost-Keynesian growth model. Structural change. Multi-sector models. ResumoNeste artigo, pretende-se desenvolver uma versão desagregada da abordagem pós--Keynesiana para o crescimento econômico, mostrando que de fato esse modelo pode ser tratado como um caso particular do modelo Pasinettiano de mudança estrutural e crescimento econômico. Utilizando-se o conceito de integração vertical, torna-se possível conduzir a análise iniciada por Kaldor (1956) e Robinson (1956, 1962, e seguido por Dutt (1984), Rowthorn (1982) e, posteriormente, Bhaduri e Marglin (1990) em um modelo multi-sectorial em que há aumentos da demanda e produtividade em ritmos diferentes em cada setor. Ao adotar essa abordagem, é possível mostrar que a dinâmica de mudança estrutural está condicionada não apenas aos padrões de deman-♦ A preliminary version of this paper was presented in the VIII International Colloquium on Economic Growth, Structural Change and Institutions held in Galway, Ireland, May 26-28, 2011. We would like to thank the participants of the colloquium and an anonymous referee for helpful comments. The usual disclaimer applies.Estud. Econ., São Paulo, vol.45, n.1, p. 127-152, jan.-mar. 2015 128 Ricardo Azevedo Araujo e Joanílio Rodolpho Teixeira da de evolução das preferências e da difusão do progresso tecnológico, mas também com as características distributivas da economia, que podem dar origem a diferentes regimes setoriais de crescimento econômico. Além disso, é possível determinar a taxa natural de lucro que faz com que a taxa de mark-up seja constante ao longo do tempo. Palavras-ChaveModelo Pós-Keynesiano de crescimento econômico. Mudança estrutural. Modelos multi-setoriais. JEL ClassificationE21, O11.

Growth Regimes in a Structural Economic Dynamic Approach to the Neo-Kaleckian Model

“…Here we pursue this research line but following a different route. Departing from the idea that the Kaleckian may be seen as a particular case of Pasinetti's model [see Araujo and Teixeira (2015)] we show that Neo-Kaleckian analysis may be carried out in a higher degree of disaggregation due to the device of vertical integration. Such approach allows us to introduce the concept of the normal profit rate in the Kaleckian model, which coincides with the concept of natural rate of profit as coined by Pasinetti (1981).…”

“…A possible starting point to establish a bridge between the two approaches is to consider the relationship u r π = in a multi-sectoral environment. This was proved by Araujo and Teixeira (2015) by departing from Pasinetti's model and argue that since, vertically integrated 'industries' are merely weighted combinations of real industries [Steedman (1992, p. 149)], it is possible to associate to each sector a profit share, a rate of capacity utilization and a rate of profit, and to establish a relation among these variables in a multi-sectoral economy.…”

“…In the present paper, we intend to contribute to this debate by proceeding to a multisectoral assessment of the Kaleckian model [see Araujo and Teixeira (2015)]. Authors such as Dutt (1997) and Park (1995) have already approached the Neo-Kaleckian model in presence of more than one sector.…”

Mark-up pricing, sectoral dynamics, and the traverse process in a two-sector Kaleckian economy*

“…5 By using the multi-sectoral framework instead of the two sector model, Araujo and Teixeira (2015) demonstrate that each sector has a different growth regime, while Nishi (2014) reveals that the sectoral composition of saving and investment play a crucial role in determining the growth regime. However, they do not consider sectoral diversity in pricing, income distribution, or the input-output structure.…”

Economic Growth with Institutional Saving and Investment

“…Feld'man (1928) [14] and Mahalanobis (1953/4) [15] analyse the e¤ects of investment allocation on economic growth. This analysis is extended to a multi-sector model by Araujo and Teixeira (2011) [16].…”