The broken window: Fallacy or fact - A Kaleckian-Post Keynesian approach

Motivated by this, the paper utilises a Post-Keynesian framework and uses historical data Structural VAR model, and impulse response analysis to explore the relationship between natural disasters, productivity and investment within a two-simultaneous equation system, then it attempts to examine if findings lead to creative destruction (or broken window). The finding allows to conclude that occurrence of major natural disasters in the state of QLD do appear to have resulted in improved “innovation”, indicating the technology is improving, as a result of the natural disaster, this can be due to increase in the speed at which new innovations are brought to market.