Hysteresis in the Kaleckian Growth Model

Christian Schoder
Written By SCEPA

WORKING PAPER

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This paper studies the endogeneity of the normal utilization rate and the expected secular rate of sales growth empirically for the US manufacturing sector and its sub-sectors.

Using a dynamic linear specification of the Kaleckian investment function in state-space form and by the aid of the Kalman filter, we find evidence for an endogenous adjustment of both the normal utilization rate and the expected secular rate of sales growth.

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