An attempt to integrate Keynes and Kalecki: investment and dynamics

Vol. 39 No. 3 (2019)

Jul-Sep / 2019
Published July 1, 2019
PDF-Portuguese (Pt-BR)
PDF-Portuguese (Pt-BR)

How to Cite

Busato, Maria Isabel, Ana Cristina Reif, and Mario Luiz Possas. 2019. “An Attempt to Integrate Keynes and Kalecki: Investment and Dynamics”. Brazilian Journal of Political Economy 39 (3), 509-26. https://doi.org/10.1590/0101-35172019-2909.

An attempt to integrate Keynes and Kalecki: investment and dynamics

Maria Isabel Busato
Professora do Instituto de Economia da Universidade Federal do Rio de Janeiro – IE/UFRJ, Rio de Janeiro/RJ, Brasil.
Ana Cristina Reif
Professora do Instituto de Economia da Universidade Federal do Rio de Janeiro – IE/UFRJ, Rio de Janeiro/RJ, Brasil.
Mario Luiz Possas
Professor Titular do Instituto de Economia da Universidade Federal do Rio de Janeiro – IE/UFRJ, Rio de Janeiro/RJ, Brasil.
Brazilian Journal of Political Economy, Vol. 39 No. 3 (2019), Jul-Sep / 2019, Pages 509-526

Abstract

Keynes and Kalecki were the forerunners of the models of economic dynamics based on the Principle of Effective Demand (PDE) and assigned central role to investment for understanding dynamics. Kalecki’smodel describes a regular cyclical dynamics - with well-marked standard - associated with dual and lagged investment effect. Keynes’s modelin turn describes a potentially unstable dynamics, a result of the decisions of agents whose expectations are formed under conditions of uncertainty. This article aims to build an integrated interpretation of Keynes and Kalecki’s views, enabling a better understanding of the stylized facts that show that the capitalist dynamic is marked by phases of cyclical regularity that are eventually and suddenly broken, leading to instability.

JEL Classification: E12; E11; E22.


Keywords: Dynamics, investment, cycle, instability, principle of effective demand