On the Desired Rate of Capacity Utilization
WORKING PAPER
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This paper examines the endogeneity of the rate of capacity utilization in the long run within the context of the controversy surrounding the Kaleckian model of growth and distribution.
We argue that the proposed long-run dynamic adjustment, proposed by Kaleckian scholars, lacks a coherent economic rationale. We show that there are evidence in the theory and the empirical research that justify this behavior of returns to scale. In that way the desired rate of utilization becomes endogenous.