Endogenous Technological Change and Distribution with Inter-Class Conflict: A Kaleckian Model of Growth

This paper presents a Kaleckian model of growth in which both technological change and income distribution are endogenously determined by inter-class conflict between capitalists and workers. Considering the adjustment speed of variables, we investigate the medium-run equilibrium and the long-run equilibrium. In the medium run, the rate of capital accumulation and the profit share are adjusted to the medium-run equilibrium. In the long run, the normal planned rate of capacity utilization and the growth rate of labor productivity are adjusted to the long-run equilibrium. In the analysis, two alternative investment functions are used: a Kalecki type investment function and a Marglin and Bhaduri (1990) type investment function. We show that different results are obtained both in the medium run and in the long run depending on which investment function is used.