Is Michał Kalecki's theory of investment applicable today? The case study of agricultural holdings in the EU countries A., Kułyk P. (2020): Is Michał Kalecki's theory of investment applicable today? The case study of agricultural holdings in the EU countries. Agric. Econ. – Czech, 66: 317-324.
download PDF

The purpose of the article is to recognise whether Michał Kalecki‘s investment theory works in the functioning of farms in the EU countries. We use the data of farms of the EU FADN (Farm Accountancy Data Network) system. The dynamic panel (the 1st difference generalised method of moments – GMM) estimator model was employed for analysis. The assessments were related to the economic size of farms. The results have allowed the partial confirmation of the validity of Kalecki's model to explain agricultural holdings adjustment mechanisms in the investment sphere. It is about medium-large (ES4) and large farms (ES5). In smaller farms (ES1–3) this mechanism was not recorded, and also in the largest agricultural holdings (ES6) where the development mechanism is more complex. Thus the size of farms determines different changes in investments activity in analysed groups of farms. Results suggest that a demand effect of investment expenditures, in the case of the examined group of farms, predominates to supply effect. It can be attributed to the fact that agriculture through the institutional system (the CAP – Common Agricultural Policy) and the peculiarities of this sector have weakened internal competition. We should be aware that the developmental mechanisms of agricultural holdings in the investment sphere are complex, and Kalecki’s theory may somewhat better understand these mechanisms.

Arellano M., Bond S. (1991): Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The Review of Economic Studies, 58: 277–297.
Augustowski L. (2016): The impact of market factors on the income of individual agricultural holdings (Wpływ czynników rynkowych na dochody indywidualnych gospodarstw rolnych). In: Miciuła I. (ed.): Otoczenie organizacyjne a uwarunkowania społeczno-gospodarcze. Wyd. Naukowe Sophia, Katowice: 87–99. (in Polish)
Benjamin C., Phimister E. (2002): Does capital market structure affect farm investment? A comparison using French and British farm-level panel data. American Journal of Agricultural Economics, 84: 1115–1129.
Blecker R. (2002): Distribution, demand and growth in neo-Kaleckian macro-models. In: Setterfield M. (ed.): The Economics of Demand-led Growth: Challenging the Suply-Side Vision of the Long Run. Cheltenham, Edward Elgar Publishing: 129–152.
Blundell R., Bond S., Windmeijer F. (2001): Estimation in dynamic panel data models: Improving on the performance of the standard GMM estimator. In: Baltagi B., Fomby T., Carter H. (eds): Nonstationary Panels, Panel Cointegration, and Dynamic Panels. Bingley, Emerald Bingley, Group Publishing Limited: 53–91.
Chen K., Chen Y., Fan S. (2018): Is agricultural investment in China affected by economic slowdown? World Food Policy, 4: 175–195.
Czubak W., Pawłowski K. (2020): Sustainable economic development of farms in Central and Eastern European countries driven by pro-investment mechanisms of the common agricultural policy. Agriculture, 10: 1–19.
Czyżewski B., Majchrzak A. (2017): Economic size of farms and adjustments of the total factor productivity to the business cycle in Polish agriculture. Agricultural Economics – Czech, 63: 93–102.
EU FADN (2020): European Union Farm Accountancy Data Network. EU FADN. Available at (accessed Jan 2020).
Fertő I., Zoltán L., Bakucs S., Bojnec L., Latruffe L. (2017): East-West European farm investment behaviour − The role of financial constraints and public support. Spanish Journal of Agricultural Research, 15: 1–7.
Haan C. (2002): Statistical Methods in Hydrology. Ames, Iowa, Iowa State University Press: 5–378.
Hattaf K., Riad D., Yousfi N. (2017): A generalised business cycle model with delays in gross product and capital stock. Chaos, Solitons & Fractals, 98: 31–37.
Hein E., van Treeck T. (2010): Financialisation in post-Keynesian models of distribution and growth: a systematic review. In: Setterfield M. (ed.): Handbook of Alternative Theories of Economic Growth. Cheltenham, Edward Elgar Publishing: 277–292.
Kalecki M. (1935): A macrodynamic theory of business cycle. Econometrica, 3: 327–344.
Kalecki M. (1937): A theory of the business cycle. Review of Economic Studies, 4: 77–97.
Kallas Z., Serra T., Gil J. (2012): Effects of policy instruments on farm investments and production decisions in the Spanish COP sector. Applied Economics, 44: 3877–3886.
Kataria K., Curtiss J., Balmann A. (2012): Drivers of agricultural physical capital development. Theoretical framework and hypotheses, factor markets. Working Paper No. 18. Centre for European Policy Studies.
Kirchweger S., Kantelhardt J. (2015): Impacts of the government-supported investments on the economic farm performance in Austria. Agricultural Economics – Czech, 61: 343–355.
Krupowicz W., Bielska A., Budzyński T. (2015): The effects of defective spatial structure on the agricultural property market. Folia Oeconomica Stetinensia, 15: 174–191.
Kufel J. (2016): Cyclicality of markups in the EU food industry and the Michał Kalecki theory. Acta Scientiarum Polonorum, Oceonomia, 15: 51–63.
Maart-Noelck S., Musshoff O. (2013): Investing today or tomorrow? An experimental approach to farmers' decision behaviour. Journal of Agricultural Economics, 64: 295–318.
Magnan A. (2015): The financialisation of agri-food in Canada and Australia: Corporate farmland and farm ownership in the grains and oilseed sector. Journal of Rural Studies, 41: 00–00.
Minsky H. (2008): Stabilising an Unstable Economy. New York, McGraw-Hill Professional: 4–432.
Salahuddin M., Islam M. (2008): Factors affecting investment in developing countries: A panel data study. The Journal of Developing Areas, 42: 21–37.
Sedláček J., Kouřilová J., Pšenčík J. (2012): Models of the realistic reporting of subsidies in the farm accounting. Agricultural Economics – Czech, 58: 34–40.
Skevas T., Wu F., Guan Z. (2017): Farm capital investment and deviations from the optimal path. Journal of Agricultural Economics, 69: 561–577.
Van Herck K., Vranken L. (2013): Direct payments and land rents: evidence from new member states. Factor markets. Working paper No. 62. Brussels, Centre for European Policy Studies.
Viaggi D., Raggi M., Paloma S. (2011): Understanding the determinants of investment reactions to decoupling of the Common Agricultural Policy. Land Use Policy, 28: 495–505.
Windmeijer F. (2005): A finite sample correction for the variance of linear efficient two-step GMM estimators. Journal of Economics, 126: 25–51.
Wooldridge J. (2002): Econometric analysis of cross section and panel data. London, MIT Press: 206–209. Available at (accessed Jan 2020).
Xiao-Hong W., Yan-Hui Z., Ka L. (2016): Stability and Hopf bifurcation for Kaldor-Kalecki model of business cycles with two time delays. International Journal of Engineering Research & Science, 2: 1–14.
download PDF

© 2021 Czech Academy of Agricultural Sciences | Prohlášení o přístupnosti