IDEAS home Printed from https://ideas.repec.org/a/bcr/ensayo/v1y2011i61-62p103-137.html
   My bibliography  Save this article

A Cointegration Analysis on the Principle of Effective Demand in Argentina (1980-2007)

Author

Listed:
  • Florencia Médici

    () (National University of Moreno - University of Buenos Aires)

Abstract

The aim of this paper is to evaluate the empirical validity of the principle of the effective demand in the long run in Argentina from 1980 to 2007 using the Sraffian Supermultiplier model (Serrano, 1995). This will be done through the cointegration analysis using the Johansen method. The results of the evaluation show that the demand components have permanent effects in the long run and that there is a positive causality from final demand autonomous components towards the product. Furthermore, an estimate of both the short and the long run dynamics through an Error-Correction Model is presented. Most empirical studies in which income is determined by demand work with exports-led model à la Thirlwall (1999, 2000). Instead, not only the exports but also both the government and the non-salaried private expenditures are included in this article.

Suggested Citation

  • Florencia Médici, 2011. "A Cointegration Analysis on the Principle of Effective Demand in Argentina (1980-2007)," Ensayos Económicos, Central Bank of Argentina, Economic Research Department, vol. 1(61-62), pages 103-137, January -.
  • Handle: RePEc:bcr:ensayo:v:1:y:2011:i:61-62:p:103-137
    as

    Download full text from publisher

    File URL: http://www.bcra.gov.ar/pdfs/investigaciones/61_62_Medici.pdf
    File Function: Spanish version (versión en Español)
    Download Restriction: no

    References listed on IDEAS

    as
    1. Prebisch, Raúl, 1950. "The economic development of Latin America and its principal problems," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 29973, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February.
    3. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 25-40, March.
    4. Schefold, B, 1988. "The Dominant Technique in Joint Production Systems," Cambridge Journal of Economics, Oxford University Press, vol. 12(1), pages 97-123, March.
    5. George K. Zestos & Xiangnan Tao, 2002. "Trade and GDP Growth: Causal Relations in the United States and Canada," Southern Economic Journal, Southern Economic Association, vol. 68(4), pages 859-874, April.
    6. H. Sonmez Atesoglu, 1993. "Balance-of-Payments-Constrained Growth: Evidence from the United States," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 15(4), pages 507-514, July.
    7. Anthony P. Thirlwall, 2011. "Balance of payments constrained growth models: history and overview," PSL Quarterly Review, Economia civile, vol. 64(259), pages 307-351.
    8. Lavoie, Marc, 1995. "The Kaleckian Model of Growth and Distribution and Its Neo-Ricardian and Neo-Marxian Critiques," Cambridge Journal of Economics, Oxford University Press, vol. 19(6), pages 789-818, December.
    9. Nelson H. Barbosa-Filho, 1999. "A Note on the Theory of Demand-Led Growth," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 1999-06, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    10. John S.L. McCombie, 1997. "On the Empirics of Balance-Of-Payments–Constrained Growth," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 19(3), pages 345-375, March.
    11. Oscar de-Juan, 2005. "Paths of accumulation and growth: Towards a Keynesian long-period theory of output," Review of Political Economy, Taylor & Francis Journals, vol. 17(2), pages 231-252.
    12. Juan Carlos Moreno-Brid, 1999. "Mexico's Economic Growth and the Balance of Payments Constraint: A cointegration analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 13(2), pages 149-159.
    13. Kaldor, Nicholas, 1971. "Conflicts in National Economic Objectives," Economic Journal, Royal Economic Society, vol. 81(321), pages 1-16, March.
    14. Magnus Blomström & Robert E. Lipsey & Mario Zejan, 1996. "Is Fixed Investment the Key to Economic Growth?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 269-276.
    15. Trezzini, Attilio, 1995. "Capacity Utilisation in the Long Run and the Autonomous Components of Aggregate Demand," Contributions to Political Economy, Oxford University Press, vol. 14(0), pages 33-66.
    16. Schlicht, Ekkehart, . "Isolation and Aggregation in Economics," Monographs in Economics, University of Munich, Department of Economics, number 3, November.
    17. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    18. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    19. Trezzini, Attilio, 1998. "Capacity Utilisation in the Long Run: Some Further Considerations," Contributions to Political Economy, Oxford University Press, vol. 17(0), pages 53-67.
    20. Jorge Carrera & Mariano Féliz & Demian Panigo, 1999. "Una medición de los canales de transmisión de las fluctuaciones económicas. El caso de Argentina y los Estados Unidos," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0(4), pages 77-118.
    21. Garegnani, Pierangelo, 1984. "Piero Sraffa," Cambridge Journal of Economics, Oxford University Press, vol. 8(1), pages 1-2, March.
    22. H. Sonmez Atesoglu, 1995. "An explanation of the slowdown in US economic growth," Applied Economics Letters, Taylor & Francis Journals, vol. 2(4), pages 91-94.
    23. Serrano, Franklin, 1995. "Long Period Effective Demand and the Sraffian Supermultiplier," Contributions to Political Economy, Oxford University Press, vol. 14(0), pages 67-90.
    24. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    25. A. P. Thirlwall, 2002. "The Nature of Economic Growth," Books, Edward Elgar Publishing, number 2579.
    26. H. Sonmez Atesoglu, 1997. "Balance-Of-Payments–Constrained Growth Model and Its Implications for the United States," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 19(3), pages 327-335, March.
    27. Pierangelo Garegnani & Antonella Palumbo, 1997. "Accomulation of capital," Departmental Working Papers of Economics - University 'Roma Tre' 0002, Department of Economics - University Roma Tre.
    28. Nelson H. Barbosa Filho, 2001. "Effective Demand and Growth: An Analysis of the Alternative Closures of Keynesian Models," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2001-05, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Argentina; cointegration; economic growth; effective demand; gross domestic product;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcr:ensayo:v:1:y:2011:i:61-62:p:103-137. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Federico Grillo). General contact details of provider: http://edirc.repec.org/data/bcraaar.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.