Volume 44, Number 172,
January-March 2013
Financial Instability in Latin America:
A Minskian-Kaleckian Perspective
Tsuyoshi Yasuhara
Investment and the Capacity Utilization Rate in the Kaleckian Model ( ...continuation )


where:

 represents the real salary rate
 is labor productivity, and
 is the propensity to save


Oreiro (2004) analyzes the fact that oligopolistic entities tend to maintain excessive capacity to keep their level of production in the face of others. Lima and Meirelles (2007) show that an adjustment in capacity utilization affects the mark-up level of the interest rates of banks. If the increase in the capacity utilization rate reflects the possibility to generate additional profits, the banks prefer to lower the interest rate to support additional investment. On the other hand, if companies do not have the expected rate of high profits, the increased utilization rate causes the bank risk, as they will require a higher interest rate.

Figure 5. Rate of Accumulation [I/K(-1)]
Source: eclac, Latin America and the Caribbean: Historical Series of Economic Data > 5; Latin America and the Caribbean, National Accounts in Dollars at Current Prices, 1990-2008 > 5.2; Gross Domestic Product by Type of Expense, http://www.eclac.cl/deype/cuaderno37/datos/5.2.1.xls; Preliminary Economic Balance of Latin America and the Caribbean 2011, p. 102.



Figure 6. Capacity Utilization Rate (%)
Source: eclac, Latin America and the Caribbean: Historical Series of Economic Data > 5; Latin America and the Caribbean, National Accounts in Dollars at Current Prices, 1990-2008 > 5.2; Gross Domestic Product by Type of Expense, http://www.eclac.cl/deype/cuaderno37/datos/5.2.1.xls; Preliminary Economic Balance of Latin America and the Caribbean 2011, p. 102.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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