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What is Wrong with Heterodox Economics? Kalecki’s Profit Theory as an Example

9 Pages Posted: 23 May 2011 Last revised: 3 Jun 2015

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Date Written: May 18, 2011

Abstract

Kalecki’s profit theory has always been popular among heterodox economist as an alternative approach to solve the paradox of monetary profits. In the present paper his formula ‘The workers spend what they get, the capitalists get what they spend’ is scrutinized for its logical and factual implications. The analysis shows that Kalecki’s alternative approach points in the right direction but unfortunately shares a crucial conceptual error with standard economics.

Keywords: national income accounting, zero profit economy, distributed profit, income definition

JEL Classification: B50, E12, E25, B22, B41

Suggested Citation

Kakarot-Handtke, Egmont, What is Wrong with Heterodox Economics? Kalecki’s Profit Theory as an Example (May 18, 2011). Available at SSRN: https://ssrn.com/abstract=1845803 or http://dx.doi.org/10.2139/ssrn.1845803

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17
Stuttgart
Germany

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