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Kalecki and the Grossmann Model of economic breakdown

Trigg, Andrew B. (2004). Kalecki and the Grossmann Model of economic breakdown. Science and Society, 68(2) pp. 187–205.

DOI (Digital Object Identifier) Link: http://dx.doi.org/10.1521/siso.68.2.187.31004
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Abstract

Henryk Grossmann radically changed the course of Marxist economics with his 1929 adaptation of Marx's law of the falling rate of profit. By a simple extension of Otto Bauer's simulation of Marx's reproduction schema, Grossmann demonstrates that accumulation leads to a shrinking pool of surplus value and eventual economic breakdown. It can, however, be argued that once the role of money is taken seriously in Marx's reproduction schema it is no longer possible for accumulation to swallow up all the available surplus value. By identifying the role of the Kalecki principle in Marx's schema, that capitalists earn what they spend, a modified simulation of the Bauer/Grossmann model is developed in which there is no precise mechanical breakdown. This approach leads to a focus, in interpreting Marx's law of the falling rate of profit, on problems of realization associated with an increasing mass of surplus value.

Item Type: Journal Article
ISSN: 0036-8237
Academic Unit/Department: Social Sciences > Economics
Interdisciplinary Research Centre: Innovation, Knowledge & Development research centre (IKD)
Item ID: 3060
Depositing User: Users 6043 not found.
Date Deposited: 21 Jun 2006
Last Modified: 02 Dec 2010 19:49
URI: http://oro.open.ac.uk/id/eprint/3060
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