Abstract

Though published in the early 1930’s, and despite recent interest in his theory,
Kalecki’s investment model has not been subject to much empirical testing. This paper specifies
a three equation short run version of Kalecki’s investment model and estimates it using
annual U.S. data between 1948-1980. A surprising result is that U.S. economy appears to
have been dynamically unstable in the period analyzed, with cycles of increasing amplitude.

JEL Classification: B51; E22; E32; E11.