Abstract

In contrast with usual exegesis found in the literature, Kalecki’s profit model has been estima-ted using U.S. annual data between 1947-1985. Assuming one-year investment lag, Kalecki’s model explains 96% of the variation in real gross U.S. profits in the period analyzed. According to the estimated profit multiplier, one billion 1982 dollars increase in real gross investment (augmented by the government and external deficits) would increase real gross profits by 1.1 billion dollars and capitalist consumption by 63.3 million dollars. However, thc estimated profit multiplier is fairly low when compared with Kalecki’s own estimate for the U.S. during the Great Depression.