Time-to-build in dynamics of economic models I: Kaleckiʹs model

We show that Kaleckiʹs idea of introducing the time for building investment goods into the dynamics of economic processes is still attractive, being a universal mechanism for inherent cyclic behaviour of the economy. We use modern methods of dynamical systems theory and bifurcation theory to present the classical Kalecki model and detect cyclic behaviour within it, thus gaining a deeper understanding of Kaleckiʹs discovery. We demonstrate that Kalecki was the precursor of the approach to economics in which the laws of macroeconomic dynamics are described by differential equations. In the present paper we consider the interrelationship between cycles and the delay time linked to the time of building investment goods.