A supermultiplier model of the natural rate of growth

Abstract

We propose a supermultiplier model that includes formal and informal wage redistributive devices enabling everyone in the population to satisfy their primary needs. By introducing population growth and technical progress into the model, we show that wage redistribution gives rise to an autonomous consumption component, the growth rate of which corresponds to the natural rate of growth. The three main outcomes of the model are as follows: (a) Harrodian knife‐edge instability can be tamed, (b) the long‐run rate of growth of the economy converges toward the natural rate of growth, and (c) the rate of employment stabilizes but at a level that can differ from that of full employment.

Government public infrastructure investment and economic performance in Spain (1980–2016)

“…Our results are in line with the results obtained by some studies on the fiscal multiplier for the case of Spain (De Castro, 2006; Marcellino, 2006; Martínez and Zubiri, 2014). Our results are also in line with Postkeynesian theoretical approaches that focus on the role played by the autonomous components of demand in driving output (Serrano, 1995; Dejuan, 2005; Girardi and Pariboni, 2016, 2020; Lavoie, 2016; Allain, 2021; Perez-Montiel and Erbina, 2020, 2021; Pérez-Montiel and Pariboni, 2021) [6].…”

The macroeconomic implications of zero growth: a post-Keynesian approach

“…For this purpose, we will use an autonomous demandled growth model, a type of model which has become popular in heterodox macroeconomics and which has recently been merged with the Kaleckian distribution and growth models. 4 These models are based on the work by Serrano (1995aSerrano ( , 1995b (2015) and Lavoie (2016), Kaleckian authors, such as Allain (2019Allain ( , 2021, Dutt (2019Dutt ( , 2020, Hein (2018), Hein/Woodgate (2021), Lavoie/Nah (2020), Nah/Lavoie (2017, 2019a, 2019b and Palley (2019) have also applied this type of model by introducing a Sraffian supermultiplier process into some variants of the Kaleckian distribution and growth models. In general terms, these models have tried to explain growth episodes through the growth of an autonomous demand component, such as autonomous consumption, residential investment, exports, or government expenditures.…”

Growth, cycles, and residential investment

“…The SSM approach has gained renewed interest by neo-Kaleckian scholars in recent years (Lavoie, 2016;Allain, 2021), since it offers an adjustment mechanism that preserves canonical features such as the paradox of thrift and the paradox of costs. The model is built upon two main assumptions about the growth rate of autonomous expenditures: these are exogenous to the current income-generating process and also independent of other macroeconomic factors such as population growth and financial variables.…”