Distribution and Growth after Keynes

Distribution and Growth after Keynes

A Post-Keynesian Guide

Eckhard Hein

In the first part of the book, Eckhard Hein presents a comprehensive overview of the main approaches towards distribution and growth including the contributions of Harrod and Domar, old and new neoclassical theories including the fundamental capital controversy critique, the post-Keynesian contributions of Kaldor, Pasinetti, Thirlwall and Robinson, and finally the approaches by Kalecki and Steindl. In the second part of the book neo- and post-Kaleckian models are gradually developed, introducing saving from wages, international trade, technological progress, interest and credit. Issues of ‘financialisation’ are also explored and empirical results related to the different models are presented.

Chapter 8: Extending Kaleckian models II: technical progress

Eckhard Hein

Subjects: economics and finance, history of economic thought, post-keynesian economics


In the discussion of the Kaleckian distribution and growth models so far we have assumed that the production technology does not change during the growth process. This assumption will be dropped in this chapter, and the effects of technological progress on the long-run equilibrium will be analysed. Modern Kaleckian distribution and growth models have increasingly taken productivity growth and other supply-side considerations into account. For example, Rowthorn (1981), Taylor (1991, pp. 225–228), Lavoie (1992, pp. 316–327, 2014, chap. 6.9), You (1994), Cassetti (2003), Dutt (2003, 2006a, 2010b, 2010c), Raghavendra (2006), Hein and Tarassow (2010), Naastepad and Storm (2010), Sasaki (2011), Schutz (2012) and Storm and Naastepad (2012, 2013) have introduced endogenous productivity growth into different variants of the Kaleckian model. And the studies by Naastepad (2006) on the Netherlands and by Hartwig (2013) on Switzerland, already referred to in the review of demand regime estimations in Chapter 7 of this book, have included productivity growth issues in their empirical estimations for these countries as well. The present chapter builds on this recent theoretical and empirical literature on productivity growth in Kaleckian models. We will integrate productivity growth into the post-Kaleckian Bhaduri/Marglin (1990) model.

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