The Korean Journal of Economic Studies
A Kaldorian Macrodynamic Model of Debt, Finance, and Growth
Sangheon Lee / Min-Chang KoYear 2010Vol. 58No. 2
Abstract
This paper examines the dynamic growth path of a modern financial economy. It constructs a macrodynamic model in which real and monetary sectors interact through investment finances and debt obligations. It puts together the growth and distribution theory of Bhaduri and Marglin (1990),Minskian financial theory, and a balance-sheet constraint of stock-flow consistent models. Our study shows that a long-term equilibrium may exist for a limited range of parameter values. It also shows that dynamic characteristics of growth path change drastically for different parameter values or variables. Itsuggests the existence of alternative accumulation regimes categorically different from those of Bhaduri and Marglin (1990).