Abstract
Most Kaleckian models assume a perfectly elastic labor supply, an assumption that is questionable for many developed economies. This paper presents simple labor-constrained Kaleckian models and uses these models to compare the implications of fi nancialization under labor-constrained and dual-economy conditions. Th e paper complements the analysis in Skott and Ryoo (2008) which did not include labor-constrained Kaleckian economies. We show that for plausible parameter values the fi nancial changes commonly associated with financialization tend to be expansionary in both dual-economy and labor-constrained settings.