A multi-sector Kaleckian-Harrodian model for long-run analysis

By Eric Kemp-Benedict

PKES Working Paper 1702

March 2017

This paper presents a step toward a post-Keynesian dynamic model for long-run policy analysis. It is a multi-sector Harrodian-Kaleckian growth model with locally unstable dynamics contained by a Hicksian floor and ceiling. It adopts a model of biased technological change that links productivity growth with the functional income distribution. The model features endogenous wages, prices, labor and capital productivities, capital utilization, employment, and labor participation. At present it lacks government, financial, and foreign sectors, but despite this it exhibits interesting behavior. The model generates asymmetric business cycles, with a long expansion and a short contraction, as well as long waves and changes in the structure of employment.

Keywords: post-Keynesian, Harrodian-Kaleckian, multiplier-accelerator, technological change

JEL classification: E11 E17 E22