The Kaleckian model of growth and distribution and its neo-Ricardian and neo-Marxian critiques

Abstract

This paper analyses the newer Kaleckian models of growth and distribution and the criticisms that have been addressed to them by neo-Marxian and neo-Ricardian authors. The models discussed assume overhead labour costs and target return pricing. The main issues are the form of the investment function and the notions of normal rates of profit and of normal rates of capacity utilisation. Despite the relevance of (and often the similarity between) the neo-Marxian and neo-Ricardian critiques, it is shown that the main features of the Kaleckian growth model may still be preserved.