Demand-led growth and accommodating supply

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

doi:10.1093/cje/bez055

Cited by 86 publications

(59 citation statements)

References 56 publications

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“…At the same time, there is uncertainty because the driver cannot work forever. These properties are incorporated in the present model, which is based on the same set up of Fazzari et al ( 2020 ) and by Ferri et al ( 2019 ) except for the consumption function, where its two components (see 3.2 and 3.5 below) are specified in a different way. In fact, the durable consumption function not only maintains the dependence on an exogenous rate of growth ( g *), but it also depends, cyclically and nonlinearly, on the rate of unemployment.…”

Section: Autonomous Demand In a Medium-run Modelmentioning

confidence: 99%

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Autonomous demand, multiple equilibria and unemployment dynamics

Ferri

Tramontana

2020

J Econ Interact Coord

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The paper presents a medium-run growth model driven by autonomous demand, where aggregate demand and supply interact and unemployment is present and plays different roles. In particular, it generates a feedback from supply to aggregate demand rooted in the presence of heterogeneous consumers and an uncertain environment. Two are the main consequences of this approach. The first is that multiple equilibria can be generated. The second is that equilibria may have different stability properties. In this perspective, growth becomes a dynamic process where initial conditions matter and history plays an important role.

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Section: Autonomous Demand In a Medium-run Modelmentioning

confidence: 99%

“…Fazzari et al ( 2020 ) have inserted the role of autonomous demand into a Harrod–Minsky model, where aggregate supply accommodates to demand (on this aspect, see also Palley 2018 ). Unemployment remains bounded, while the reconciliation process between actual growth and the natural one takes place.…”

Section: Introductionmentioning

confidence: 99%

Autonomous demand, multiple equilibria and unemployment dynamics

Ferri

Tramontana

2020

J Econ Interact Coord

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“…PKs have long argued that supply responds to changes in demand. This operates either via an endogenous non-accelerating inflation rate of unemployment (NAIRU) (Skott 2005;Stockhammer 2008) or via endogenous productivity growth (Storm/Naastepad 2013;Fazzari et al 2018). As a result, supply adjusts over longer periods to demand, and the natural rate of output or growth is endogenous (Setterfield 1993;Dutt 2006;Lavoie 2009).…”

Section: A Bit Of Backgroundmentioning

confidence: 99%

An update on Kalecki–Minsky modelling

Stockhammer

2019

European Journal of Economics and Economic Policies: Intervention

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Within post-Keynesian macroeconomics, the Kaleckian streams analysing demand regimes and the Minskyan streams analysing financial instability have proceeded relatively independently. To develop a comprehensive alternative to mainstream economics, post-Keynesians will have to integrate Kaleckian and Minskyan arguments with an analysis of the supply side. This paper gives a partial update on advances in Kalecki-Minsky modelling. First, theoretically, it discusses the notion of pseudo-Goodwin cycles. Second, it presents empirical findings on endogenous debt cycles. Third, it reviews evidence of the relative size of distributional and financial effects on demand. Fourth, it reports results on the drivers of household debt.

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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

Journal of Post Keynesian Economics

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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 86 publications

References 56 publications

Autonomous demand, multiple equilibria and unemployment dynamics

Autonomous demand, multiple equilibria and unemployment dynamics

An update on Kalecki–Minsky modelling

Some comments on the Sraffian Supermultiplier approach to growth and distribution

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