The outbreak of the financial crisis in 2008 witnessed a marked contraction in US consumption spending that had hitherto been boosted by historically high levels of household debt-financing. These events question the validity of conventional models of consumption based on the life-cycle...

We develop a Keynesian model of aggregate consumption. Our theory emphasizes the importance of the relative income hypothesis and debt-finance for understanding household consumption behavior. It is shown that particular importance attaches to how net debtor households service their debts, and...

We empirically examine the relationship between U.S. output and household debt. To account for structural change due to financial liberalization, we divide the sample at the fourth quarter of 1982. We find structural differences between earlier and later business cycles for the U.S. household...

Models of the macrodynamic impact of private debt tend to emphasize the role of corporate debt. Corporate leverage affects macroeconomic outcomes and can contribute to financial fragility. We show that consumer debt is also important. We include consumer as well as corporate debt in a stock-flow...

Three competing conceptualizations of hysteresis in economics are identified: the unit/zero root approach, “true” hysteresis, and hysteresis conceived as a product of historical time. The properties of these conceptualizations are discussed and their pros and cons considered.

The purpose of this paper is to explore the similarities between Post Keynesian Economics (PKE) and Regulation Theory (RT). It is argued that, despite important differences between these traditions, the analytical contents of PKE and RT display broad similarities with respect to their treatments...

While much attention has been focused on the financial woes of the US economy in the wake of the Great Recession, this chapter focuses on an important real sector imbalance: the failure of real wages to keep pace with productivity growth over the past three decades. This imbalance is shown to...

This paper contemplates the robustness of Thirlwall’s Law, a parsimonious expression that relates long run equilibrium growth in any one region to the product of world income growth and the ratio of the income elasticities of demand for exports and imports. Various extensions of the...

This paper contributes to the debate about whether or not inflation targeting is compatible with Post Keynesian economics. It does so by developing a model that takes into account the potentially inflationary consequences of interest rate manipulations. Evaluations of the macroeconomic...

This chapter explores the Kaldorian approach to endogenous growth theory. The central principles of this approach are explored, including the claims that growth is: (a) demandled, with trade playing a central role in aggregate demand formation; and (b) pathdependent. It is shown that both the...