The Neo-Pasinetti Theorem in Cambridge and Kaleckian Models of Growth and Distribution

Kaldor's neo-Pasinetti theorem is examined in an economy where the rate of profit adjusts to higher effective demand through increases in the rate of capacity utilization rather than through increases in the margin of profit. A Tobinian investment function, where investment responds to the valuation ratio, is then introduced along with Kaleckian elements, investment depending also on the rate of utilization. It is shown that in such a modified model, the Keynesian-Kaleckian results are quite robust.