A Supplementary Note on Professor <scp>H</scp>ein's (2013) Version of A <scp>K</scp>aleckian Debt Accumulation

Franke, Reiner

doi:10.1111/meca.12110

Cited by 8 publications

(6 citation statements)

References 19 publications

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“…In this paper we will not touch upon the endogenous dynamics of the outside finance-capital ratio and its stability properties, the potential for "paradoxes of debt" or "paradoxes of outside finance," and so on. The interested reader is referred to the discussion based on similar models, like, for example, in Dutt (1995), Hein (2010;2012a, chapter 3;, Sasaki and Fujita (2012), and Franke (2015). We shall also not deal extensively with the question of whether an equilibrium rate of utilization (u*) deviating from firms' target rate of utilization (u 0 ) should be considered as an equilibrium.…”

Section: A Steindlian Model Of Distribution Growth and Stagnationmentioning

confidence: 99%

Secular Stagnation or Stagnation Policy? Steindl after Summers

Hein

2015

SSRN Journal

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The current debate on secular stagnation is suffering from some vagueness and several shortcomings. The same is true for the economic policy implications. Therefore, we provide an alternative view on stagnation tendencies based on Josef Steindl's contributions. In particular, Steindl (1952) can be viewed as a pioneering work in the area of stagnation in modern capitalism. We hold that this work is not prone to the problems detected in the current debate on secular stagnation: It does not rely on the dubious notion of an equilibrium real interest rate as the equilibrating force of saving and investment at full employment levels, in principle, with the adjustment process currently blocked by the unfeasibility of a very low or even negative equilibrium rate. It is based on the notion that modern capitalist economies are facing aggregate demand constraints, and that saving adjusts to investment through income growth and changes in capacity utilization in the long run. It allows for potential growth to become endogenous to actual demand-driven growth. And it seriously considers the role of institutions and power relationships for long-run growth-and for stagnation. JEL Classifications: B22, E11, E12, E65, O11 (1966), are completely ignored as well. 2 The same holds true for modern interpretations and applications of these approaches. This is a problem, because the theoretical foundations of modern secular stagnation debates are vague and can be challenged on several grounds. First, as is clear from the consensus proclaimed by Teulings and Baldwin (2014b) mentioned above, at the very foundations, even of the presumably more Keynesian work by Summers (2014aSummers ( , 2014bSummers ( , 2015, Krugman (2014), and others, in principle, we have an equilibrium real or natural rate of interest equalizing saving and investment in the capital market at full employment output levels, which, however, may not be feasible. This constellation is vulnerable to critique from the "Cambridge controversies in the theory of capital," questioning an interest rate-inverse and continuously downward sloping capital demand curve in a more-than-one-good

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Section: A Steindlian Model Of Distribution Growth and Stagnationmentioning

confidence: 99%

Secular Stagnation or Stagnation Policy? Steindl after Summers

Hein

2015

SSRN Journal

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“…The question of dynamic stability of regimes has been further debated, and models have been presented with less restrictive results regarding instability, if dividends, capital gains, Tobin's q and other features are included (Sasaki/Fujita 2012, Franke 2016. Furthermore, authors like Charles (2008aCharles ( , 2008bCharles ( , 2008c, Lima/Meirelles (2007), Meirelles/Lima (2006), Nishi (2012b) and Ryoo (2013), have introduced Minsky's (1986) distinction between hedge, speculative and Ponzi financing into different variants of Kaleckian distribution and growth models, and they have provided richer models with several more regimes and sources of instability.…”

Section: The Integration Of Interest and Credit Into Post-keynesian Dmentioning

confidence: 99%

Post-Keynesian macroeconomics since the mid 1990s: main developments

Hein

2017

European Journal of Economics and Economic Policies: Intervention

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractIn this paper the main developments in post-Keynesian macroeconomics since the mid1990s will be reviewed. For this purpose the main differences between heterodox economics in general, including post-Keynesian economics, and orthodox economics will be reiterated and an overview over the strands of post-Keynesian economics, their commonalities and developments since the 1930s will be outlined. This will provide the grounds for touching upon three important areas of development and progress of postKeynesian macroeconomics since the mid-1990s: first, the integration of distribution issues and distributional conflict into short-and long-run macroeconomics, both in theoretical and in empirical/applied works; second, the integrated analysis of money, finance and macroeconomics and its application to changing institutional and historical circumstances, like the process of financialisation; and third, the development of full-blown macroeconomic models, providing alternatives to the mainstream 'New Consensus Model' (NCM), and allowing to derive a full macroeconomic policy mix as a more convincing alternative to the one implied and proposed by the mainstream NCM, which has desperately failed in the face of the recent crises.

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“…This proposal of Hein (2013) allows to recover the original features of Hein (2007). However, as Franke (2016) points out, Hein's (2013) assumption of a given equity price may lead to a non-positive retained earnings of the firms in the long-run equilibrium. Instead of a constant equity price, Franke (2016) proposes a constant number of equities.…”

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confidence: 99%

“…However, as Franke (2016) points out, Hein's (2013) assumption of a given equity price may lead to a non-positive retained earnings of the firms in the long-run equilibrium. Instead of a constant equity price, Franke (2016) proposes a constant number of equities. This modification of Franke (2016) opens up the possibility of positive retained earnings without any significant change in Hein's (2007) original model.…”

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confidence: 99%

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Corporate debt, endogenous dividend rate, instability and growth

Parui

2021

Metroeconomica

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In a neo-Kaleckian growth-model, we endogenize the dividend rate and corporate debt 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 rise in the floor level of the targeted dividend-capital ratio has a destabilizing effect on the economy. The same is true for a rise in the interest rate. Moreover, a significant rise in the interest rate may cause instability in the economy. Therefore, a lower value of the floor level of the targeted dividend-capital ratio and a lower level of interest rate are desirable for promoting stability in the economy.

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A Supplementary Note on Professor Hein's (2013) Version of A Kaleckian Debt Accumulation

Cited by 8 publications

References 19 publications

Secular Stagnation or Stagnation Policy? Steindl after Summers

Secular Stagnation or Stagnation Policy? Steindl after Summers

Post-Keynesian macroeconomics since the mid 1990s: main developments

Corporate debt, endogenous dividend rate, instability and growth

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