Equity issuance, share buy-back and growth in a Kaldor-Kalecki model

IF 1.9 Q2 ECONOMICS JOURNAL OF ECONOMIC STUDIES Pub Date : 2024-01-09 DOI:10.1108/jes-07-2023-0353

Sébastien Charles

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Abstract

Purpose

The aim of this article is to assess the macroeconomic consequences of some specific aspects of financialization (i.e. share buy-back) using a hybrid post-Keynesian model of growth and distribution based on Kaldorian and Kaleckian characteristics.

Design/methodology/approach

The study follows a post-Keynesian approach and deals with financialization issues by implementing several numerical simulations.

Findings

The numerical simulations reveal the negative real impacts of massive share repurchases on the rate of accumulation because they immediately siphon off revenues directly intended for investment projects. Moreover, the negative effect of share buy-backs is reinforced especially when firms' investment decisions are more sensitive to a variation in retained earnings. Next, this macro-model also reproduces several well-known figures of the Kaleckian tradition and the paradox of costs.

Research limitations/implications

The present article can be considered as a starting point for further theoretical extensions and requires empirical validation.

Originality/value

The Kaldor-Kalecki macro-model could be useful for policymakers who are interested in containing some of the negative excesses of financialization.

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卡尔多-卡莱基模型中的股票发行、股票回购和增长

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来源期刊

JOURNAL OF ECONOMIC STUDIES ECONOMICS-

CiteScore

4.00

自引率

5.90%

发文量

期刊介绍： The Journal of Economic Studies publishes high quality research findings and commentary on international developments in economics. The journal maintains a sound balance between economic theory and application at both the micro and the macro levels. Articles on economic issues between individual nations, emerging and evolving trading blocs are particularly welcomed. Contributors are encouraged to spell out the practical implications of their work for economists in government and industry

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