THEORETICAL AND EMPIRICAL SHORTCOMINGS OF THE KALECKIAN INVESTMENT FUNCTION

ABSTRACT The accumulation function is critical for the properties and implications of structuralist and post‐Keynesian growth models, but there is considerable disagreement over the specification of this function. A large Kaleckian literature extends the standard short‐run ‘Keynesian stability condition’ to the long run by assuming that long‐run accumulation is relatively insensitive to variations in the utilization rate of capital. The Kaleckian position has been defended by Dutt and Lavoie, among others. This paper examines the defense and finds it unconvincing: the Kaleckian specification of the accumulation function is behaviorally implausible and lacks empirical support.