Working Paper - How Short is the Short Run in the Neo-Kaleckian Growth Model?
New Working Paper - How Short is the Short Run in the Neo-Kaleckian Growth Model?
My paper “How Short is the Short Run in the Neo-Kaleckian Growth Model?” just came out in the Economics Department Working Paper series of the The New School for Social Research
You can find it on RePEc: here
Here is the abstract:
The paper provides an analytical solution to the differential equation that regulates the motion of the neo-Kaleckian model in the short run. After presenting a simple open economy neo-Kaleckian model with government activity, the paper analytically derives an expression for the time of adjustment, defined as the time required for the system to make a k-percent adjustment from one steady-state to another. The solution shows that there is an inverse relationship between the strength of the Keynesian stability condition and the the time of adjustment. Last, the model is calibrated for the US, showing that vicinity of the new equilibrium is reached after a period of about 4 quarters. By formally analyzing the out-of-equilibrium trajectory of the neo-Kaleckian model, this contribution moves away from the method of comparative dynamics and provides a historical-time representation of the model’s traverse.
Further discussion and the replication code for the online Appendix can be found here
