Kaleckian

Kaleckian refers to a school of macroeconomic thought based on the work of Polish economist Michał Kalecki. Kaleckian economics emphasizes the central role of aggregate demand in determining output and employment in capitalist economies, especially under conditions of imperfect competition and mark-up pricing. A core premise is that the level of economic activity in the short run is driven by planned investment and government spending, while the distribution of income between wages and profits shapes both consumption and investment.

Key ideas include the importance of effective demand for determining output, the view that investment is guided by expected profitability and the utilization of productive capacity, and the notion that savings behavior is largely endogenous to income distribution. The theory allows for involuntary unemployment, arguing that insufficient demand can leave resources idle even when workers are available. The wage share is seen as a crucial determinant of demand: higher wages can boost consumption, while higher profits can influence investment through profitability and financing conditions. Kaleckian analysis often distinguishes between profit-led growth, where higher profitability spurs investment, and wage-led growth, where higher wages raise demand enough to offset lower profits.

Kaleckian economics is a major strand within post-Keynesian economics and has influenced empirical and policy discussions on fiscal stimulus, distributional effects, and demand management. It is typically contrasted with neoclassical and some orthodox growth theories by stressing distribution, imperfect competition, and the demand side as primary drivers of economic performance.