“The total movement of this disorder is its order”: Investment and utilization dynamics in long-run disequilibrium

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The total movement of this disorder is its order (accepted version).pdf (1.2 MB)

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https://onlinelibrary.wiley.com/doi/abs/10.1111/meca.12377

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https://doi.org/10.1111/meca.12377
 http://hdl.handle.net/11603/24126

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UMBC Mathematics and Statistics Department

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2022-01-12

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journal articles
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Thompson, S. (2022). “The total movement of this disorder is its order”: Investment and utilization dynamics in long-run disequilibrium. Metroeconomica, 00, 1– 45. https://doi.org/10.1111/meca.12377

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This is the peer reviewed version of the following article: Thompson, S. (2022). “The total movement of this disorder is its order”: Investment and utilization dynamics in long-run disequilibrium. Metroeconomica, 00, 1– 45. https://doi.org/10.1111/meca.12377, which has been published in final form at https://doi.org/10.1111/meca.12377. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.
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Abstract

Recently economists have developed Kaleckian-Harrodian models, in which non-capacity-creating autonomous demand acts as a stabilizing force that drives longrun growth. But critics have questioned the plausibility of the stability conditions for these models. Motivated by this controversy, in this paper I formulate an alternative framework, in which stable equilibria need not exist, and solution trajectories can perpetually fluctuate in violent and aperiodic ways, but the long-run dynamics can be understood in terms of time averages. On this basis I argue that key findings in the Kaleckian-Harrodian literature can be sustained even if the stability conditions are rejected.