Technical Change, Growth and Distribution: A Steady-state Approach to ‘Unsteady’ Growth on Kaldorian Lines

The Bhaduri–Marglin post-Kaleckian model in the history of distribution and growth theories: an assessment by means of model closures*

“…Similar conclusions could have been drawn by Kurz (1990), who provided a similar model framework to Bhaduri and Marglin's (1990), deriving different regimes -and furthermore discussing different forms of technical progress within this framework. We have termed this modelling approach, generating the potential of different regimes of demand and growth in a closed economy model without saving out of wages, the 'post-Kaleckian model' (Hein 2014, ch.…”

“…Starting from a review of the main strands of orthodox and heterodox distribution and growth models and their distinguishing features, with the post-Kaleckian Bhaduri and Marglin (1990) (and Kurz 1990) model as a specific but highly flexible variant of heterodox distribution and growth theories, we have developed a simple modelling framework in which we could treat these different theories as different variants of model closure. This has allowed for a systematic comparison of exogenous and endogenous variables, of the 'logic' or the chain of causalities in each of the approaches, and of the generation of the long-run equilibrium positions of the system.…”

“…2 Our concern is more modest and rather didactic and pedagogical. We attempt to contextualise and situate the Bhaduri and Marglin (1990) and Kurz (1990) model in the history of distribution and growth theories and to compare it in a systematic way to other approaches using the method of model closures.…”

“…In its closed economy version without saving out of wages it generates uniquely depressing effects of redistribution at the expense of the wage share on the rates of capacity utilisation, capital accumulation, growth and profit. The post-Kaleckian model, based on the works of Bhaduri and Marglin (1990) and Kurz (1990), however, also contains a direct profitability effect in the investment function. Therefore, its closed-economy version without saving out of wages is able to generate different regimes of demand and growth, hence positive or negative effects of a lower wage share on capacity utilisation, capital accumulation, growth and the rate of profit, depending on the relative weights of 7.…”

Untitled

“…6). The post-Kaleckian approach based on Bhaduri and Marglin (1990) and Kurz (1990) has not been included in this kind of literature so far, and we will thus fill this gap here. But before doing so in Section 3 of the paper, we will briefly review the major distinguishing features of the main approaches towards (functional) income distribution and growth in Section 2.…”