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Growth, income distribution and autonomous public expenditures

Abstract : This article presents a Kaleckian model which is enriched by introducing autonomous public expenditures growing at an exogenous rate. We show that the usual properties are not affected in the short run: an increase in the profit share thus causes a decrease in the rate of capital accumulation (growth is wage-led). But long run properties are strongly affected: public expenditures play a role of automatic stabilizer such that accumulation rate converges toward the growth rate of public expenditures. The effect of a change in income distribution on the growth rate is then only transient. However, the impacts on the variables in level (output, capital stock, labor...) remain permanent.
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https://hal.archives-ouvertes.fr/hal-00964308
Contributor : Umr 8174 Centre d'Économie de la Sorbonne <>
Submitted on : Monday, March 24, 2014 - 10:45:30 AM
Last modification on : Friday, March 27, 2020 - 2:41:15 AM

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Olivier Allain. Growth, income distribution and autonomous public expenditures. European Journal of Economic and Social Systems, Lavoisier, 2012, 25 (1-2), pp.59-72. ⟨10.3166/ejess.25.59-72⟩. ⟨hal-00964308⟩

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