Abstract

In contrast with usual exegesis found in the literature, Kalecki’s profit model has
been estimated 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, the estimated profit multiplier is fairly low when compared with Kalecki’s own
estimate for the U.S, during the Great Depression.

JEL Classification: E25; B51.