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Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte

Author

Listed:
  • Mark Setterfield

    (Department of Economics, New School for Social Research)

Abstract
This reply to Botte (2019) responds to criticisms of the methods used to estimate the normal rate of capacity utilization and a tolerable interval of variation in the actual rate of capacity utilization around the normal rate in Setterfield (2019a). It concludes with some further reflections on the concept of corridor instability.

Suggested Citation

  • Mark Setterfield, 2019. "Tolerable ranges of variation in the rate of capacity utilization and corridor instability: a reply to Florian Botte," Working Papers 1905, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1905
    as

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    File URL: http://www.economicpolicyresearch.org/econ/2019/NSSR_WP_052019.pdf
    File Function: First version, 2019
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    References listed on IDEAS

    as
    1. Lavoie, Marc, 1995. "The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(6), pages 789-818, December.
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    3. Peter Skott, 2012. "Theoretical And Empirical Shortcomings Of The Kaleckian Investment Function," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 109-138, February.
    4. Michalis Nikiforos, 2016. "On the ‘utilisation controversy’: a theoretical and empirical discussion of the Kaleckian model of growth and distribution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(2), pages 437-467.
    5. Edward Amadeo, 1987. "Expectations in a steady state model of capacity utilization," Textos para discussão 169, Department of Economics PUC-Rio (Brazil).
    6. Shyam Gouri Suresh & Mark Setterfield, 2015. "Firm performance, macroeconomic conditions, and “animal spirits” in a Post Keynesian model of aggregate fluctuations," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 38(1), pages 38-63, July.
    7. Peter Skott, 2019. "Autonomous demand, Harrodian instability and the supply side," Metroeconomica, Wiley Blackwell, vol. 70(2), pages 233-246, May.
    8. Michalis Nikiforos, 2018. "Some comments on the Sraffian Supermultiplier approach to growth and distribution," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 41(4), pages 659-675, October.
    9. Skott,Peter, 2008. "Conflict and Effective Demand in Economic Growth," Cambridge Books, Cambridge University Press, number 9780521066310, September.
    10. James D. Hamilton, 2018. "Why You Should Never Use the Hodrick-Prescott Filter," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 831-843, December.
    11. Mark Setterfield & Joana David Avritzer, 2020. "Hysteresis in the normal rate of capacity utilization: A behavioral explanation," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 898-919, November.
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    13. Eckhard Hein & Marc Lavoie & Till van Treeck, 2012. "Harrodian Instability And The ‘Normal Rate’ Of Capacity Utilization In Kaleckian Models Of Distribution And Growth—A Survey," Metroeconomica, Wiley Blackwell, vol. 63(1), pages 139-169, February.
    14. Mark Setterfield, 2019. "Long-run variation in capacity utilization in the presence of a fixed normal rate," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 443-463.
    15. Mark Setterfield, 2019. "Time variation in the size of the multiplier: a Kalecki–Harrod approach," Review of Keynesian Economics, Edward Elgar Publishing, vol. 7(1), pages 28-42, January.
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    17. Steven M. Fazzari & Pietro E. Ferri & Edward G. Greenberg & Anna Maria Variato, 2013. "Aggregate demand, instability, and growth," Review of Keynesian Economics, Edward Elgar Publishing, vol. 1(1), pages 1-21, January.
    18. Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 587-612.
    19. Michalis Nikiforos, 2018. "Some Comments on the Sraffian Supermultiplier Approach to Growth and Distribution," Economics Working Paper Archive wp_907, Levy Economics Institute.
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    Cited by:

    1. Mark Setterfield & Joana David Avritzer, 2020. "Hysteresis in the normal rate of capacity utilization: A behavioral explanation," Metroeconomica, Wiley Blackwell, vol. 71(4), pages 898-919, November.

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    More about this item

    Keywords

    Normal rate of capacity utilization; Harrodian instability; corridor instability;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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