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Macroeconomic transformation of capitalism - How to achieve politically determined growth rates?

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  • Herr, Hansjörg

Abstract

An economy with a stable medium-term growth rate of zero - or any other politically determined growth rate - needs new regulations and institutions to realise this target. Such an economy would look very different compared with the existing type of capitalism we have today in the Global North. In the existing capitalist system, investment demand as well as autonomous demand elements like government demand, export demand or autonomous consumption demand drive the dynamic of GDP and the whole economic system. In a zero growth economy the different demand aggregates are determined by economic policy including heavy intervention in income and wealth distribution and the direction of technological development. Whether such an alternative system is understood as a version of highly regulated capitalism or as a new system is a question of taste.

Suggested Citation

  • Herr, Hansjörg, 2021. "Macroeconomic transformation of capitalism - How to achieve politically determined growth rates?," IPE Working Papers 170/2021, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    • Handle: RePEc:zbw:ipewps:1702021
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    References listed on IDEAS

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    1. Brett Fiebiger, 2018. "Semi-autonomous household expenditures as the causa causans of postwar US business cycles: the stability and instability of Luxemburg-type external markets [Cycles and trends in US net borrowing fl," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(1), pages 155-175.
    2. Hansjörg Herr, 2010. "Credit expansion and development – A Schumpeterian and Keynesian view of the Chinese miracle," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 7(1), pages 71-89.
    3. Daniel Detzer & Nina Dodig & Trevor Evans & Eckhard Hein & Hansjörg Herr & Franz Josef Prante, 2017. "The German Financial System and the Financial and Economic Crisis," Financial and Monetary Policy Studies, Springer, number 978-3-319-56799-0, June.
    4. Petra Dünhaupt & Hansjörg Herr, 2021. "Global value chains – a ladder for development?," International Review of Applied Economics, Taylor & Francis Journals, vol. 35(3-4), pages 456-474, July.
    5. Fisher, Jonathan D. & Johnson, David S. & Smeeding, Timothy M. & Thompson, Jeffrey P., 2020. "Estimating the marginal propensity to consume using the distributions of income, consumption, and wealth," Journal of Macroeconomics, Elsevier, vol. 65(C).
    6. Joseph W. Gruber & Steven B. Kamin, 2017. "Corporate Buybacks and Capital Investment: An International Perspective," IFDP Notes 2017-04-11, Board of Governors of the Federal Reserve System (U.S.).
    7. Daniel Detzer & Nina Dodig & Trevor Evans & Eckhard Hein & Hansjörg Herr & Franz Josef Prante, 2017. "The Historical Development of the German Financial System," Financial and Monetary Policy Studies, in: The German Financial System and the Financial and Economic Crisis, chapter 0, pages 17-27, Springer.
    8. Petra Dünhaupt & Hansjörg Herr, 2022. "Global Value Chains—A Panacea for Development?," Springer Books, in: Christina Teipen & Petra Dünhaupt & Hansjörg Herr & Fabian Mehl (ed.), Economic and Social Upgrading in Global Value Chains, chapter 0, pages 55-96, Springer.
    9. Daniel Detzer & Nina Dodig & Trevor Evans & Eckhard Hein & Hansjörg Herr & Franz Josef Prante, 2017. "Regulation of the German Financial System," Financial and Monetary Policy Studies, in: The German Financial System and the Financial and Economic Crisis, chapter 0, pages 91-109, Springer.
    10. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    11. Daniele Girardi & Riccardo Pariboni, 2016. "Long-run Effective Demand in the US Economy: An Empirical Test of the Sraffian Supermultiplier Model," Review of Political Economy, Taylor & Francis Journals, vol. 28(4), pages 523-544, October.
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    13. Daniel Detzer & Nina Dodig & Trevor Evans & Eckhard Hein & Hansjörg Herr & Franz Josef Prante, 2017. "The Institutional Structure of the German Financial System," Financial and Monetary Policy Studies, in: The German Financial System and the Financial and Economic Crisis, chapter 0, pages 55-70, Springer.
    14. Stiglitz, Joseph E & Uy, Marilou, 1996. "Financial Markets, Public Policy, and the East Asian Miracle," The World Bank Research Observer, World Bank, vol. 11(2), pages 249-276, August.
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    More about this item

    Keywords

    Transformation of capitalism; economic systems; zero growth;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • P41 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Planning, Coordination, and Reform

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