Aspects of Kalecki's method
This thesis consists of three papers which examine three aspects of Kalecki's method, from differing levels of abstraction. The first is at the level of theory and traces the evolution of Kalecki's pricing equation for the manufacturing sector of modern capitalist economies. It is argued that, although the general determinants of price in the form of a mark-up on unit costs remained constant, nevertheless Kalecki tried many different models in order to obtain microfoundations consistent with his macroanalysis. His original formulation incorporated only considerations specific to the firm, although wider considerations entered into the 'degree of monopoly' which was the main determinant of the mark-up. Later versions explicitly allowed for the role of competitors within the industry by incorporating the industry average price into the pricing equation. The second paper considers the interrelationship of two different types of theory - the microanalysis described in the earlier paper with the Kalecki's macroanalysis. In doing so it attempts to shed some light on the methodological issues associated with microfoundations. In particular, it is shown that, for Kalecki, neither 'macro' nor 'micro' dominate, but that the two jointly determine both the level of output and the level of employment. The final paper is concerned with questions relating to the nature of theorizing, and compares Kalecki's approach to this with Keynes'. It specifically considers the reasons behind Keynes' hostility, as editor of the Economic Journal, to papers submitted by Kalecki. This hostility is traced to important methodological differences which can best be thought of in terms of paradigm (or conceptual framework) clashes. The clashes related to such differences as different starting points for theory, different levels of abstraction and views about generality, and differing views about the relative importance of induction versus deduction.