2. THE BASIC MODEL

The modelling strategy follows Kalecki [21] in dealing with wage and profit recipients (or “workers” and “capitalists”) and the state as the main economic actors. Extensions toward agricultural and non-agricultural groups as well as the ubiquitous “foreigners” on the other side of the balance of payments are brought in from time to time. This class analysis is rudimentary, but has the advantage of fitting with available functional income distribution data. It can and should be extended in specific country contexts, especially since behavioral differences across classes (and conflicts among them) are key explanatory factors for much macroeconomics in the Third World.

For simpler mathematics, we work with continuous time, even ...

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