nep-pke 2005-10-08 papers

on Post Keynesian Economics

Issue of 2005‒10‒08
two papers chosen by
Karl Petrick
Leeds Metropolitan University

Interest, debt and capital accumulation - a Kaleckian approach By Eckhard Hein
A Estrutura das Revoluções Científicas na Economia e a Revolução Keynesiana By José Guilherme Silva Vieira; Ramón Vicente Garcia Fernandes

Interest, debt and capital accumulation - a Kaleckian approach

By:	Eckhard Hein (Macroeconomic Policy Institute IMK in the Hans Boeckler Foundation)
Abstract:	In the present paper we explicitly introduce interest payments and debt into a Kaleckian distribution and growth model with an investment function very close to Kalecki’s original writings. The effects of interest rate variations on the short-run equilibrium values of capacity utilisation, capital accumulation and the rate of profit are derived, and the long run effects on the equilibrium debt-capital-ratio are also analysed. It is shown, that the effects of interest variations on the endogenously determined equilibrium values of the model do not only depend on the parameter values in the saving and investment functions but also on the interest elasticity of distribution and in some cases on initial conditions with respect to the interest rate and the debt- capital-ratio. If the conditions for short-run ‘normal’ effects of interest rate variations are given, the economy will be characterised by a long-run unstable debt-capital-ratio and by the macroeconomic ‘paradox of debt’. These results are similar to other models and hint to the robustness of Kaleckian ‘monetary’ models of distribution and growth with respect to the specification of the investment function.
Keywords:	Interest rate, debt, capital accumulation, Kaleckian model
JEL:	E12 E22 E25 E44 O42
Date:	2005–10–05
URL:	http://d.repec.org/n?u=RePEc:wpa:wuwpma:0510007&r=pke

A Estrutura das Revoluções Científicas na Economia e a Revolução Keynesiana

By:	José Guilherme Silva Vieira (Universidade Federal do Paraná); Ramón Vicente Garcia Fernandes (Universidade Federal do Paraná)
Abstract:	The starting point of this paper is 'The structure of scientific revolutions' written by Thomas Kuhn. Kuhn´s framework essentially proposes that science(s) evolve through a sequence of periods of “normal science”, exceptionally interrupted by “scientific revolutions” leading to “paradigm shifts”. This paper analyzes whether this scheme can be applied to the evolution of Economics. Evidence suggests that the Keynesian Revolution can be treated as the best example of a kuhnian revolution in Economics; this model, however, is not so useful. to explain the fall of this paradigm.
Keywords:	Keywords: 1) Thomas Kuhn 2) Paradigms 3) Keynesian Revolution; 1) Thomas Kuhn 2) Paradigms 3) Keynesian Revolution
JEL:	B
Date:	2005–09–30
URL:	http://d.repec.org/n?u=RePEc:wpa:wuwpmh:0509009&r=pke

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