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Degrowth in a neo-Kaleckian model of growth and distribution? A theoretical compatibility and stability analysis

Author

Listed:
  • Antoine Monserand

    (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

Abstract
Situated at the interface between post-Keynesian and ecological economics, this article investigates the theoretical possibilities for a degrowth transition to take place while preserving macroeconomic stability. More precisely, the objective is to find whether in a neo-Kaleckian model of growth and distribution an equilibrium with a zero or even negative rate of accumulation can coexist with the Keynesian stability condition being verified. Our results are threefold. First, we confirm that adding the rate of depreciation to the canonical model allows for such an equilibrium to exist, but argue in favor of considering animal spirits rather than the depreciation factor as a potential policy variable for the management of the degrowth transition. Second, other elements such as overhead labour, a tax on capital, an autonomous component in consumption expenditures and a budget deficit can all give this result and provide more 'space' for the equilibrium with a negative rate of accumulation. Finally, we use the mechanism of the Sraffian supermultiplier to illustrate that combined political action and adoption of a more ecological mode of living can be the drivers of a stable degrowth transition. After the transition is completed, the stabilisation of aggregate consumption maintains the economy in a stationary state, at an ecologically sustainable level.

Suggested Citation

  • Antoine Monserand, 2019. "Degrowth in a neo-Kaleckian model of growth and distribution? A theoretical compatibility and stability analysis," Working Papers hal-02012632, HAL.
    • Handle: RePEc:hal:wpaper:hal-02012632
    Note: View the original document on HAL open archive server: https://hal.science/hal-02012632
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    References listed on IDEAS

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    Cited by:

    1. Eckhard Hein & Valeria Jimenez, 2022. "The macroeconomic implications of zero growth: a post-Keynesian approach," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 19(1), pages 41-60, April.
    2. Oberholzer, Basil, 2023. "Post-growth transition, working time reduction, and the question of profits," Ecological Economics, Elsevier, vol. 206(C).

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    More about this item

    Keywords

    Neo-Kaleckian; Degrowth; Transition; Stability; Autonomous consumption; Super-multiplier;
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