Demand-Led Growth and Accommodating Supply

Fazzari, Steven M.; Ferri, Piero; Variato, Anna Maria Grazia

doi:10.2139/ssrn.3108711

Cited by 19 publications

(32 citation statements)

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“…Fazzari, Ferri, and Variato () have recently also used this mechanism. Their focus is the goods market and showing how aggregate supply accommodates aggregate demand growth, rather than showing how labor supply and demand growth balance.…”

Section: Adding the Labor Market And Unemploymentmentioning

confidence: 99%

The economics of the super‐multiplier: A comprehensive treatment with labor markets

Palley

2018

Metroeconomica

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This paper links the super‐multiplier to Keynesian macroeconomics, showing it to be the most Keynesian of growth perspectives. Next, the paper shows that the super‐multiplier is a micro‐economically coherent theory of investment and capital accumulation. Firms’ decisions regarding capital accumulation coordinate demand and supply growth in goods markets. The paper then explores the implications of incorporating the super‐multiplier in the neo‐Kaleckian and Cambridge growth models. Lastly, it shows how labor markets and unemployment can be added into super‐multiplier models to provide a comprehensive growth model that addresses Solow's (1956, Journal of Economics, 70, 65–94) labor market knife‐edge problem. Incorporating labor markets does not change the fundamental super‐multiplier result that growth is determined by the growth of autonomous demand.

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Section: Adding the Labor Market And Unemploymentmentioning

confidence: 99%

The economics of the super‐multiplier: A comprehensive treatment with labor markets

Palley

2018

Metroeconomica

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“…Second, supply (covering both product and labor market) is endogenously settled and in-teracts with aggregate demand; which in turns affects the determinants and the nature of the unemployment rate. This route is pursued by different articles, but three of them are worth mentioning because they are representative of two different methodological approaches aiming at the same target: Dosi et al (2010 and2017) and Fazzari et al (2018). Both set of authors refer to the endogenous interactions between demand and supply but Fazzari et al (2018) base their analysis upon a macro approach, while Dosi et al (2010 and2017) follow an ABM strategy.…”

Section: Introductionmentioning

confidence: 99%

“…Indeed the main target of this work is to deepen Fazzari et al (2018)'s work, and to consider the intersections linking the two approaches. More specifically we study a nonlinear system where both aggregate demand and supply are endogenous and generate bounded unemployment, followed by a methodological effort direct to identify possible lines of convergence with the AMB approach, as a by-product of the presence of heterogeneity in the model.…”

Section: Introductionmentioning

confidence: 99%

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Growth, unemployment and heterogeneity

Ferri

Cristini

Variato

2019

J Econ Interact Coord

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The paper analyzes unemployment in a medium-run growth model, where aggregate demand and supply interact. On one hand, autonomous demand drives the dynamics of the system, while heterogeneity in the consumption function, due to the presence of unemployment, strengthens the links with supply aspects. On the other hand, both the rate of growth of labor productivity and labor supply are endogenous. Two major results are obtained. First, unemployment allows the reconciliation between aggregate demand and supply. The second is that unemployment remains bounded and this means that the interaction between aggregate demand and supply thwarts instability. These results are in keeping with those obtained by means of a bottom-up approach, typical of agent based models (ABM). Possible explanations and implications of this convergence are put forward. the study of a nonlinear system where both aggregate demand and supply are endogenous and generate a bounded unemployment, followed by a methodological effort direct to identify possible lines of convergence with the AMB approach. This is a by-product of the presence of heterogeneity in our model.

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“…It builds on the work and ideas of Pierangelo Garegnani (1962Garegnani ( , 1992 and borrows features from the original supermultiplier model of John Hicks (1950). Recent contributions include Bortis (1997), Cesaratto, Serrano, and Stirati (2003), de-Juan (2005), Freitas and Serrano (2015), Cesaratto (2015), Serrano, Freitas, and Bhering (2017), Fazzari et al (2013), and Fazzari, Ferri, and Variato (2018).…”

Section: Introductionmentioning

confidence: 99%

Some Comments on the Sraffian Supermultiplier Approach to Growth and Distribution

Nikiforos¹

2018

SSRN Journal

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The paper discusses the Sraffian supermultiplier (SSM) approach to growth and distribution. It makes five points. First, in the short run the role of autonomous expenditure can be appreciated within a standard post-Keynesian framework (Kaleckian, Kaldorian, Robinsonian, etc.).Second, and related to the first, the SSM model is a model of the long run and has to be evaluated as such. Third, in the long run, one way that capacity adjusts to demand is through an endogenous adjustment of the rate of utilization. Fourth, the SSM model is a peculiar way to reach what Garegnani called the "Second Keynesian Position." Although it respects the letter of the "Keynesian hypothesis," it makes investment quasi-endogenous and subjects it to the growth of autonomous expenditure. Fifth, in the long run it is unlikely that "autonomous expenditure" is really autonomous. From a stock-flow consistent point of view, this implies unrealistic adjustments after periods of changes in stock-flow ratios. Moreover, if we were to take this kind of adjustment at face value, there would be no space for Minskyan financial cycles. This also creates serious problems for the empirical validation of the model.

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Demand-Led Growth and Accommodating Supply

Cited by 19 publications

References 0 publications

The economics of the super‐multiplier: A comprehensive treatment with labor markets

The economics of the super‐multiplier: A comprehensive treatment with labor markets

Growth, unemployment and heterogeneity

Some Comments on the Sraffian Supermultiplier Approach to Growth and Distribution

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