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Schumpeter and Keynes: Economic growth in a super-multiplier model

Author

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  • Nomaler, Önder

    (UNU-MERIT)

  • Spinola, Danilo

    (UNU-MERIT, Maastricht University)

  • Verspagen, Bart

    (UNU-MERIT, Maastricht University)

Abstract

We present a model of economic growth that is based on Keynesian ideas (the role of autonomous demand in economic growth) as well as Schumpeterian notions (technological change). Our model fits in the Sraffian supermultiplier (SSM) tradition, and we endogenise the growth rate of autonomous demand, and semi-endogenise productivity growth. The basic model has a steady state that is consistent with a stable employment rate. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy stable. We also introduce a version of the model where the burden for stabilisation falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.

Suggested Citation

  • Nomaler, Önder & Spinola, Danilo & Verspagen, Bart, 2020. "Schumpeter and Keynes: Economic growth in a super-multiplier model," MERIT Working Papers 2020-049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2020049
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    File URL: https://www.merit.unu.edu/publications/wppdf/2020/wp2020-049.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dvoskin, Ariel & Torchinsky Landau, Matías, 2023. "Income distribution and economic cycles in an open-economy supermultiplier model," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 273-291.

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    More about this item

    Keywords

    Economic growth model; Sraffian supermultiplier; Research and Development; R&D; Keynesian theory; Technological change;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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