IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v33y2009i5p967-984.html
   My bibliography  Save this article

Aggregate demand and the endogeneity of the natural rate of growth: evidence from Latin American economies

Author

Listed:
  • Gilberto A. Libânio

Abstract

This paper aims to explore the Keynesian idea that aggregate demand matters for economic activity, both in the short and long run. To that extent, it discusses the endogeneity of the natural rate of growth, and presents two empirical exercises: the first one tests for unit roots in output for 12 Latin American countries using panel data. The results suggest that gross domestic product series are non-stationary and therefore shocks (both from supply and demand) have persistent effects in the economy. The second exercise tests the hypothesis of an endogenous natural rate of growth, and suggests that potential output has been influenced by the actual level of economic activity in Latin American countries. This result corroborates the hypothesis that aggregate demand has long-run effects in the economy. Copyright The Author 2009. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Suggested Citation

  • Gilberto A. Libânio, 2009. "Aggregate demand and the endogeneity of the natural rate of growth: evidence from Latin American economies," Cambridge Journal of Economics, Oxford University Press, vol. 33(5), pages 967-984, September.
  • Handle: RePEc:oup:cambje:v:33:y:2009:i:5:p:967-984
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/ben059
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Adam Jaffe & Manuel Trajtenberg, 1999. "International Knowledge Flows: Evidence From Patent Citations," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 105-136.
    2. Malerba, Franco, 1992. "Learning by Firms and Incremental Technical Change," Economic Journal, Royal Economic Society, vol. 102(413), pages 845-859, July.
    3. Marghertta Russo & T. P. Hughes, 2000. "Complementary Innovations And Generative Relationships: An Ethnographic Study," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(6), pages 517-558.
    4. Maryann P. Feldman & Cynthia R. Ronzio, 2001. "Closing the innovative loop: moving from the laboratory to the shop floor in biotechnology manufacturing," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 13(1), pages 1-16, January.
    5. Antonelli, Cristiano, 2001. "The Microeconomics of Technological Systems," OUP Catalogue, Oxford University Press, number 9780199245536.
    6. Feldman, Maryann P. & Audretsch, David B., 1999. "Innovation in cities:: Science-based diversity, specialization and localized competition," European Economic Review, Elsevier, vol. 43(2), pages 409-429, February.
    7. Maskell, Peter & Malmberg, Anders, 1999. "Localised Learning and Industrial Competitiveness," Cambridge Journal of Economics, Oxford University Press, vol. 23(2), pages 167-185, March.
    8. Paul A. David, 2007. "Path Dependence, its Critics, and the Quest for ‘Historical Economics’," Chapters,in: The Evolution of Economic Institutions, chapter 7 Edward Elgar Publishing.
    9. Quere, Michel, 1994. "Basic research inside the firm: Lessons from an in-depth case study," Research Policy, Elsevier, vol. 23(4), pages 413-424, July.
    10. Paul David, 1997. "Path Dependence and the Quest for Historical Economics: One More chorus of Ballad of QWERTY," Economics Series Working Papers 1997-W20, University of Oxford, Department of Economics.
    11. Carlsson, B & Stankiewicz, R, 1991. "On the Nature, Function and Composition of Technological Systems," Journal of Evolutionary Economics, Springer, vol. 1(2), pages 93-118, April.
    12. Breschi, Stefano & Malerba, Franco, 2001. "The Geography of Innovation and Economic Clustering: Some Introductory Notes," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 817-833, December.
    13. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    14. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    15. Cristiano Antonelli & Michel Quere, 2002. "The Governance of Interactive Learning within Innovation Systems," Urban Studies, Urban Studies Journal Limited, vol. 39(5-6), pages 1051-1063, May.
    16. Martin, Ron, 1999. "The New 'Geographical Turn' in Economics: Some Critical Reflections," Cambridge Journal of Economics, Oxford University Press, vol. 23(1), pages 65-91, January.
    17. Cooke, Philip & Gomez Uranga, Mikel & Etxebarria, Goio, 1997. "Regional innovation systems: Institutional and organisational dimensions," Research Policy, Elsevier, vol. 26(4-5), pages 475-491, December.
    18. Patel, Pari, 1995. "Localised Production of Technology for Global Markets," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 141-153, February.
    19. Nelson, Richard R, 1998. "The Agenda for Growth Theory: A Different Point of View," Cambridge Journal of Economics, Oxford University Press, vol. 22(4), pages 497-520, July.
    20. Christian Longhi, 1999. "Networks, Collective Learning and Technology Development in Innovative High Technology Regions: The Case of Sophia-Antipolis," Regional Studies, Taylor & Francis Journals, vol. 33(4), pages 333-342.
    21. Feldman, Maryann P, 2001. "The Entrepreneurial Event Revisited: Firm Formation in a Regional Context," Industrial and Corporate Change, Oxford University Press, vol. 10(4), pages 861-891, December.
    22. G. B. Richardson, 1998. "The Economics of Imperfect Knowledge," Books, Edward Elgar Publishing, number 1524, April.
    23. Brusco, Sebastiano, 1982. "The Emilian Model: Productive Decentralisation and Social Integration," Cambridge Journal of Economics, Oxford University Press, vol. 6(2), pages 167-184, June.
    24. Belussi, Fiorenza, 1999. "Policies for the Development of Knowledge-Intensive Local Production Systems," Cambridge Journal of Economics, Oxford University Press, vol. 23(6), pages 729-747, November.
    25. Malerba, Franco, et al, 1999. "'History-Friendly' Models of Industry Evolution: The Computer Industry," Industrial and Corporate Change, Oxford University Press, vol. 8(1), pages 3-40, March.
    26. Paul A. David, 2007. "Path Dependence, its Critics, and the Quest for ‘Historical Economics’," Chapters,in: The Evolution of Economic Institutions, chapter 7 Edward Elgar Publishing.
    27. Storper, Michael, 1996. "Innovation as Collective Action: Conventions, Products and Technologies," Industrial and Corporate Change, Oxford University Press, vol. 5(3), pages 761-790.
    28. Metcalfe, J S, 1995. "Technology Systems and Technology Policy in an Evolutionary Framework," Cambridge Journal of Economics, Oxford University Press, vol. 19(1), pages 25-46, February.
    29. Audretsch, David B & Stephan, Paula E, 1996. "Company-Scientist Locational Links: The Case of Biotechnology," American Economic Review, American Economic Association, vol. 86(3), pages 641-652, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kevin S. Nell & A.P. Thirlwall, 2017. "Why does the productivity of investment vary across countries?," PSL Quarterly Review, Economia civile, vol. 70(282), pages 213-245.
    2. Nabakashi, Luciano & Costa da Silva, Guilherme Jonas & Oreiro, José Luis & Guimarães e Souza, Gustavo José, 2012. "The economics of demand-led growth: theory and evidence for Brazil," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    3. Matteo Lanzafame, 2014. "The balance of payments-constrained growth rate and the natural rate of growth: new empirical evidence," Cambridge Journal of Economics, Oxford University Press, vol. 38(4), pages 817-838.
    4. A. P. Thirlwall, 2013. "Economic Growth in an Open Developing Economy," Books, Edward Elgar Publishing, number 15208, April.
    5. André de Melo Modenesi & Rui Lyrio Modenesi & José Luis Oreiro & Norberto Montani Martins, 2013. "Convention, interest rates and monetary policy: a post-Keynesian–French-conventions-school approach," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(1), pages 76-92.
    6. repec:psl:moneta:2017:31 is not listed on IDEAS
    7. Fortuno-Hernández, Josefa Carolina. & Landa-Díaz, Heri Óscar., 2014. "Gasto público, inversión y crecimiento en México , 1980-2014," Panorama Económico, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(19), pages 33-52, segundo s.

    More about this item

    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:oup:cambje:v:33:y:2009:i:5:p:967-984. 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: (Oxford University Press) or (Christopher F. Baum). General contact details of provider: https://academic.oup.com/cje .

    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.

    We have no references for this item. You can help adding them by using 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.