Chapter 5: Post-Keynesian distribution and growth theories II: Kalecki and Steindl
An alternative post-Keynesian approach to distribution and growth to the one drawing on the contributions by Kaldor and Robinson can be based on the works of Michal Kalecki and Josef Steindl. As acknowledged, in particular by Robinson (1965, 1969, 1977), Klein (1975) and King (2002, chap. 2) among other authors, Kalecki had invented the ‘principle of effective demand’, that is the idea that the level of output and employment in an economy is governed by aggregate demand and that aggregate supply will adjust towards this level, even before Keynes, in a series of papers originally published in Polish. Revised and translated versions became available in English only in the late 1930s (Kalecki 1939), and the English translations of the original versions were only published in the late 1960s (Kalecki 1969a). Kalecki’s approach towards aggregate demand was highly influenced by Karl Marx’s (1885) schemes of reproduction in Capital, Volume 2, and in particular by Rosa Luxemburg’s (1913) The Accumulation of Capital. Kalecki’s approach differed from Keynes’s in that Kalecki developed the theory of effective demand in a dynamic context and explicitly considered distributional issues right from the start. Kalecki’s theory of effective demand is therefore inseparably linked with the theory of distribution and growth.
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