Michal Kalecki wrote an article on Government expenditures financed by taxes on profits, which set forth an interesting debate between him and Keynes, the latter being the editor of the Journal in which Kalecki's article was published. Later, in 1950s, Michal Kalecki wrote few empirical studies to substantiate his theory. Two of these papers dealt with the US economy, in which he adopted a novel method of analysis. However, his methodology did not have the deserved impact, even amongst his followers. This article revisits Kalecki's analysis to try and understand the recent evolution of the US economy.

April 17, 2012.