Genesis and Originality of Kalecki’s Theory

As mentioned in Chapter I, Kalecki set up for the first time the essential of his formulation of the principle of effective demand already in 1933 in his booklet Essay on the Business Cycle Theory, which was followed by several other publications, where he further developed his theory. The first objective of this chapter is to present the main steps in the development of Kalecki’s theory of profits, output and employment; whose final version we presented in the previous chapter. The second objective will be to show the originality of Kalecki’s formulation of the principle of effective demand. In this context we will discuss whether or not he anticipated some of the main ideas that Keynes put forward in The General Theory of Employment, Interest and Money, as well as some differences between the two authors. Our last objective will be to contrast Kalecki’s theory with the neoclassical synthesis into which J.R. Hicks embedded Keynes’s theory shortly after the publication of The General Theory.