Working Paper No 879

repec.nep.his

n?u=RePEc:lev:wrkpap:wp_879&r=his

comparative statics exercises of the model are altered and some complications arise. This might be

a useful and necessary extension of the model for certain issues and applications, but it cannot be

taken as a critique of the original model and does not make it any more or less helpful.

To sum up, Skott’s argument is not valid as a critique against the Kaleckian model. A model

cannot be criticized based on the complications that arise in a less abstract version of the model.

These kinds of complications are to be expected in any model and they neither make the

Kaleckian model and the concept of distribution-led growth any more or less helpful nor

constitute a fundamental weakness of them. To paraphrase Keynes (from section 2.1): I do not see

that, at the level of abstraction in which the Kaleckian model works, any different treatment is

required. In a realistic study it makes, of course, a difference whether one is considering what

institutional factors and social norms lead to changes in distribution. But the sort of

considerations that are relevant to this issue belong to a different level.

To be sure, the issues raised by Skott point to interesting future directions for theoretical and

empirical research around the Kaleckian model. A theoretical and empirical investigation of the

role of the various institutional factors and social norms is such a potentially interesting future

direction that can also allow for a more operational definition of the concept of distribution-led

growth and a better empirical estimation of the effects of changes in distribution on utilization and

growth.

7 CONCLUSION

This paper discussed two “endogeneity” critiques against the Kaleckian model of growth and

distribution. The first one, coming from a neo-Keynesian point of view, proposes a different

closure to the macro system, and maintains that income distribution becomes purely endogenous

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