Confidence, Increasing Risks, Income Distribution and Crisis in a Post-Kaleckian Stock-Flow Consistent Model

Today, PK usually stands for the post-Keynesian school. But it can also stand for the post-Kaleckian or post-Kaldorian schools; Michal Kalecki certainly seems to be the more important reference, because he is said to have discovered Keynes’s principle of effective demand on his own in 1933, and he strongly influenced Cambridge economists, Nicholas Kaldor in particular. With Rosa Luxemburg and Gunnar Myrdal, Kalecki was one of the first to show the importance of demand in growth theory. In this chapter, we have blended some ideas from Kalecki, Kaldor and Keynes — but in honour of Tadeusz Kowalik, we shall focus on the Kaleckian aspects. From Kalecki, we have taken the mark-up pricing theory, with fixed technical coefficient, capacity utilisation, and two classes of households: workers and capitalists.