Growth and Stability in a Model with Pasinettian Saving Behaviour and Neoclassical Technology.

This paper analyzes a Kaldor-Pasinetti two-class model of growth and distribution in which fiscal activity is explicitly introduced along the lines of L. Pasinetti (1989). Following the approach of W. Darity (1981), the model is reduced to a dynamic system where the Cambridge equation is one of the possible steady-state solutions. The conditions for its local stability are studied and a numerical example is presented. The antidual case is more likely to occur in order to guarantee the local stability of the Cambridge equation. Copyright 1999 by Blackwell Publishers Ltd and The Victoria University of Manchester