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Growth without Normal Capacity Utilization and the Meaning of the Long-Run Saving Ratio

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  • Attilio Trezzini

Abstract

The ratio of saving to income over a long period is analyzed here in a theoretical context that takes account of the role of aggregate demand in the growth process, and in which it is not assumed that the economy must operate at a normal rate of capacity utilization in the long run. The very notion of the long-run saving rate is therefore redefined with respect to the one found in the literature where normal utilization is assumed. We argue that the long-run saving ratio must be conceived as the result of the interaction of many different influences and can therefore be similar in radically different circumstances and different in similar circumstances with respect both to the incentive to accumulate and to the pattern of saving decisions.

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  • Attilio Trezzini, 2015. "Growth without Normal Capacity Utilization and the Meaning of the Long-Run Saving Ratio," Review of Political Economy, Taylor & Francis Journals, vol. 27(2), pages 183-200, April.
    • Handle: RePEc:taf:revpoe:v:27:y:2015:i:2:p:183-200
    DOI: 10.1080/09538259.2015.1010817
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    1. Joan Robinson, 1962. "Essays in the Theory of Economic Growth," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00626-7.
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    Cited by:

    1. Attilio Trezzini, 2017. "The Social Significance of Consumption and the Elasticity of Output to Demand in the Long Run: A Reply to Gualerzi," Review of Political Economy, Taylor & Francis Journals, vol. 29(1), pages 157-161, January.
    2. Peter Skott, 2019. "Autonomous demand, Harrodian instability and the supply side," Metroeconomica, Wiley Blackwell, vol. 70(2), pages 233-246, May.

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