Theoretical and empirical shortcomings of the Kaleckian investment function

The specification of the accumulation function is critical for the properties and implications of structuralist and post-Keynesian models. A large Kaleckian literature assumes that investment is relatively insensitive to variations in the utilization rate of capital, and this extension of a standard short-run Keynesian stability condition to the long run has been defended by Lavoie and Dutt, among others. This paper examines the theoretical and empirical arguments for and against a Kaleckian specification.