Growth Rate and Level Effects, the Stability of the Adjustment of Capacity to Demand and the Sraffian Supermultiplier

Freitas, Fábio; Serrano, Franklin

doi:10.1080/09538259.2015.1067360

Cited by 172 publications

(168 citation statements)

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“…Serrano () and Freitas and Serrano () have developed a model with this assumption, adding to it an exogenously given distribution along CM or KS lines, shown by equation or that fix the profit share, π , and an autonomous investment function, say equation . This model has an independent investment function as in the PKK models, and does not have growth determined by labor supply as in the NC model and does not insist on capacity utilization being at full or normal capacity as in CM models and can therefore be said to be in the PKK tradition.…”

Section: A General Framework and Alternative Modelsmentioning

confidence: 99%

Heterodox Theories of Economic Growth and Income Distribution: A Partial Survey

Dutt

2017

Journal of Economic Surveys

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Heterodox theories of economic growth and income distribution are surveyed, focusing on major theories and recent contributions. First, a general framework for examining growth and distribution is discussed, in terms of which classical‐Marxian and post‐Keynesian–Kaleckian and other theories are presented. Since this framework examines how variables are determined in equilibrium, second, dynamics behind equilibria are examined, focusing on goods market and labor market changes. Third, the framework is extended in a variety of ways to examine additional models addressing productivity growth and technical change, money and inflation, finance and debt, additional distributional considerations, multisector issues, open economy questions, and the environment. It is concluded that the literature on heterodox theories of growth and distribution is vibrant, large, and growing, and addresses many issues that are ignored or neglected in orthodox theories, including power, unemployment, and aggregate demand.

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Section: A General Framework and Alternative Modelsmentioning

confidence: 99%

Heterodox Theories of Economic Growth and Income Distribution: A Partial Survey

Dutt

2017

Journal of Economic Surveys

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“…According to the Classical‐Keynesian approach, the autonomous components of AD—autonomous consumption, Government spending, exports and in the short‐run investment—are the determinants of the degree of capacity utilization in the short‐run, and of the growth rate of the economy in the long‐run (Cesaratto, ; Freitas and Serrano, ). Specifically, let us refer to two equations: the first is the traditional determination of output in the short‐run through the Keynesian multiplier.…”

Section: Real and Monetary Aspects Of The Classical‐keynesian Approachmentioning

confidence: 99%

“…In writing the equation we assumed g z = g e . It can be shown that within reasonable assumptions the actual and expected rates of growth tend to adjust to the growth rate of Z (Freitas and Serrano, ).Suppose we move from a situation in which productive capacity is adequate for AD. A rise in g z , if perceived as persistent, will stimulate AD including investment.…”

Section: Real and Monetary Aspects Of The Classical‐keynesian Approachmentioning

confidence: 99%

“…This paper endeavours to fill this gap. For the reasons advanced in Cesaratto (), among competing heterodox accumulation theories the paper backs the (Sraffian) Supermultiplier approach (Freitas and Serrano, ), which provides a promising framework, consistent with the legacy of major heterodox masters including the Classical economists, Marx, Sraffa, Keynes, Kalecki and Kaldor (hereafter broadly referred to as Classical‐Keynesian approach). Money, credit and finance may play a major role in this approach.…”

Section: Introductionmentioning

confidence: 97%

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Initial and Final Finance in the Monetary Circuit and the Theory of Effective Demand

Cesaratto

2016

Metroeconomica

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One remarkable aspect of modern heterodox theory is the detachment between demand‐led growth models and endogenous money theories. This paper suggests a possible integration of the Keynesian theory of the multiplier (and supermultiplier) with endogenous money and Keynes's finance theories. Focussing upon Graziani's version of the Monetary Circuit Theory (MCT), the paper is a contribution towards reconciling the preoccupation of MCT with initial production financing, and the concern of demand‐side oriented heterodox growth theories with final financing of autonomous demand. Following Davidson, Dalziel and others, the paper shows that endogenous money finances production decisions based, inter alia, on expected consumption and investment orders. In turn, the income (super)multiplier generates actual consumption and saving. The latter funds the actual purchase of investment goods. The (super)multiplier is the nexus between initial and final finance. Various complications of this basic idea not yet considered by the literature are examined.

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“…Allain (2015) takes government expenditure growth as the driver of growth, and assumes a continuously balanced budget and thus avoids the discussion of the dynamics of government deficits or debt; Lavoie (2016) refers to autonomous consumption expenditures as determining long-run growth, but only mentions potential stability problems related to household debt without exploring them in any detail. Moreover, the lack of focus on deficit and debt dynamics seems to be true for most of the literature on the Sraffian supermultiplier emanating from the pioneering work of Serrano (1995), claiming that growth in modern capitalist economies is driven by the growth of a noncapacity creating component of aggregate demand (Cesaratto 2015, Dejuan 2005, Freitas/Serrano 2015.…”

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confidence: 99%

Autonomous government expenditure growth, deficits, debt, and distribution in a neo-Kaleckian growth model

Hein

2018

Journal of Post Keynesian Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper is linked to some recent attempts at including a non-capacity creating autonomous expenditure category as the driver and determinant of growth into Kaleckian distribution and growth models. Whereas previous contributions have focussed on taming Harrodian instability, generated by the deviation of the goods market equilibrium rate of capacity utilisation from a normal or target rate of utilisation, we rather focus on the so far neglected issues of deficit, debt and distribution dynamics in such models. For this purpose we treat the growth of government expenditures on goods and services, financed by credit creation, as the exogenous growth rate driving the system. We examine the medium-run convergence of the system towards such a growth rate, analyse the related long-run debt dynamics and deal with stability and income distribution issues. Finally we touch upon the economic and, in particular, fiscal policy implications of our model results.

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Growth Rate and Level Effects, the Stability of the Adjustment of Capacity to Demand and the Sraffian Supermultiplier

Cited by 172 publications

References 13 publications

Heterodox Theories of Economic Growth and Income Distribution: A Partial Survey

Heterodox Theories of Economic Growth and Income Distribution: A Partial Survey

Initial and Final Finance in the Monetary Circuit and the Theory of Effective Demand

Autonomous government expenditure growth, deficits, debt, and distribution in a neo-Kaleckian growth model

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