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A Note on the Theory of Demand-Led Growth

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Abstract

This paper presents a demand-led growth model where an exogenous investment function drives capital accumulation through a Bernoulli differential equation. In such framework investment generates savings through changes in capacity utilization and/or income distribution, making economic growth totally demand-led. Taking a Structuralist perspective, the model is purposefully made to be consistent with different Keynesian closures for the investment function, as well as with different assumptions about savings' adjustment to investment.

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  • Nelson H. Barbosa-Filho, 1999. "A Note on the Theory of Demand-Led Growth," SCEPA working paper series. 1999-06, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    • Handle: RePEc:epa:cepawp:1999-06
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    File URL: https://www.economicpolicyresearch.org/scepa/publications/workingpapers/1999/cepa0210.pdf
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    References listed on IDEAS

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    1. Nicholas Kaldor, 1955. "Alternative Theories of Distribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(2), pages 83-100.
    2. Trezzini, Attilio, 1995. "Capacity Utilisation in the Long Run and the Autonomous Components of Aggregate Demand," Contributions to Political Economy, Cambridge Political Economy Society, vol. 14(0), pages 33-66.
    3. Trezzini, Attilio, 1998. "Capacity Utilisation in the Long Run: Some Further Considerations," Contributions to Political Economy, Cambridge Political Economy Society, vol. 17(0), pages 53-67.
    4. Serrano, Franklin, 1995. "Long Period Effective Demand and the Sraffian Supermultiplier," Contributions to Political Economy, Cambridge Political Economy Society, vol. 14(0), pages 67-90.
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    Cited by:

    1. Nelson H. Barbosa Filho, 2005. "Estimating Potential Output : a Survey of the Alternative Methods and their Applications to Brazil," Discussion Papers 1092, Instituto de Pesquisa Econômica Aplicada - IPEA.
    2. White, Graham, 2008. "Demand-led growth with debt constraints," Working Papers 2008-01, University of Sydney, School of Economics.

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