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Endogenous money, increasing returns and economic growth: Nicholas Kaldor’s contribution

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  • Colacchio, Giorgio
  • Forges Davanzati, Guglielmo

Abstract

Nicholas Kaldor’s contribution to economic theory covers a wide range of topics, elaborated in different historical contexts, such as theories of economic growth and the balance of payments, studies on interregional divergences and monetary theory. In most cases, historians of economic thought have devoted their attention to single aspects of his contributions. This paper aims at integrating Kaldor’s monetary theory and his view of the relevance of increasing returns. It will be shown that, in Kaldor’s view, economic growth is driven by increasing effective demand which, in turn, positively affects the path of labour productivity, and that this mechanism is fully in operation on the condition that the banking sector does not restrict credit supply.

Suggested Citation

  • Colacchio, Giorgio & Forges Davanzati, Guglielmo, 2017. "Endogenous money, increasing returns and economic growth: Nicholas Kaldor’s contribution," Structural Change and Economic Dynamics, Elsevier, vol. 41(C), pages 79-85.
    • Handle: RePEc:eee:streco:v:41:y:2017:i:c:p:79-85
    DOI: 10.1016/j.strueco.2017.04.003
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    Cited by:

    1. Guglielmo Forges Davanzati, 2020. "The Italian Economic Decline and the Proposal of the State as Innovator of First Resort," Working Papers 0049, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.

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    More about this item

    Keywords

    Endogenous money; Effective demand; Increasing returns;
    All these keywords.

    JEL classification:

    • B3 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

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