ABSTRACT
This chapter argues that there is a substantial amount of empirical support for the Kaleckian approach, which is sufficient for it to be taken seriously. The evidence relates to the ‘building blocks’ of the Kaleckian approach, which can usually be compared with those of the conventional approaches. In the macro-economic sphere discussion on price changes has concentrated on whether demand influences have an effect on the rate of change of prices. Most discussion on pricing within the sphere of industrial economics and theories of the firm debates the determinants of the make-up of prices over costs, which are relevant, and the extent to which prices are rigid. Regions and areas which are relatively prosperous and dynamic attract new firms through the expansion of local demand, lowering of costs through economies of agglomeration, availability of finance generated by local savings.
