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INTEREST RATES IN POST‐KEYNESIAN MODELS OF GROWTH AND DISTRIBUTION
Author(s) -
Lavoie Marc
Publication year - 1995
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1995.tb00375.x
Subject(s) - economics , post keynesian economics , distributive property , leverage (statistics) , interest rate , keynesian economics , growth model , econometrics , macroeconomics , mathematics , statistics , pure mathematics
The goal of this article is to make a heuristic and comparative presentation of how the major post‐Keynesian models of growth and distribution integrate money, more specifically interest rates, into their framework. Five variants will be considered, all constructed on the basis of the newer Kaleckian model. It will be shown that increases in real interest rates may have surprising effects on effective demand. It will also be shown that accumulation rates and leverage ratios need not move together. The latter finding reinforces a major hypothesis of the analysis, that is, real interest rates are an exogenous distributive variable.