GROWTH, CYCLES, ASSET PRICES AND FINANCE

Several Kaleckian models are set out. Harrod- and Domar-style investment functions are specified, and combined with distributive dynamics to generate Goodwin-style cycles. A counterclockwise cycle in a two-dimensional phase diagram for capacity utilization and the wage share is based on long-run profit-led demand and a profit squeeze at high activity levels, consistent with Domar. Harrod-style investment and short-run wage-led demand generate counterfactual clockwise cycles. Financial dynamics involving the equity valuation ratio are considered. Both the ratio and equity price inflation demonstrate positive own-feedback. The ratio can be stabilized cyclically by capital stock growth and/or rising household net worth or debt. Debt accumulation persists (or overshoots) after equity price inflation switches to a negative rate. A Minsky-style model with Harrodian investment can be stabilized by accumulation of business debt.