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Growth without normal capacity utilization

Author

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  • Antonella Palumbo
  • Attilio Trezzini

Abstract

Within the demand-led approach to growth, the long-period tendencies of quantities cannot be effectively studied through theoretical positions entailing normal utilization of capacity. Whether in the form of constant or of average normal utilization, this assumption contradicts the supposed autonomy of aggregate demand. Analysis of the operation of the adjustment of capacity to demand suggests that potentially offsetting forces make fully adjusted positions irrelevant. As quantities cannot be assumed to gravitate towards such positions, the relations between quantity variables determined on the normal utilization hypothesis provide a poor guide to the analysis of reality.

Suggested Citation

  • Antonella Palumbo & Attilio Trezzini, 2003. "Growth without normal capacity utilization," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 10(1), pages 109-135.
  • Handle: RePEc:taf:eujhet:v:10:y:2003:i:1:p:109-135 DOI: 10.1080/0967256032000043814
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Anni di alta teoria (e non solo): Garegnani alla Svimez
      by Sergio Cesaratto in Politica&EconomiaBlog on 2016-10-15 13:05:00

    Citations

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    Cited by:

    1. Girardi , Daniele & Pariboni, Riccardo, 2015. "Autonomous demand and economic growth: some empirical evidence," Centro Sraffa Working Papers CSWP13, Centro di Ricerche e Documentazione "Piero Sraffa".
    2. Matthew Smith, 2012. "Demand-led Growth Theory: A Historical Approach," Review of Political Economy, Taylor & Francis Journals, vol. 24(4), pages 543-573, October.
    3. Sergio Parrinello, 2014. "A search for distinctive features of demand-led growth models," PSL Quarterly Review, Economia civile, vol. 67(270), pages 309-342.
    4. Bassi, Federico & Lang, Dany, 2016. "Investment hysteresis and potential output: A post-Keynesian–Kaleckian agent-based approach," Economic Modelling, Elsevier, pages 35-49.
    5. Jamee K. Moudud, 2010. "Strategic Competition, Dynamics, and the Role of the State," Books, Edward Elgar Publishing, number 4241, April.
    6. Eckhard Hein & Marc Lavoie & Till van Treeck, 2011. "Some instability puzzles in Kaleckian models of growth and distribution: a critical survey," Cambridge Journal of Economics, Oxford University Press, vol. 35(3), pages 587-612.
    7. Sergio Cesaratto, 2009. "Endogenous growth theory twenty years on: a critical assessment," Department of Economics University of Siena 559, Department of Economics, University of Siena.
    8. Olivier Allain, 2006. "La modération salariale : le point de vue des (néo-)kaleckiens," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00196500, HAL.
    9. Dejuán, Óscar, 2014. "The Supermultiplier as a Vertically Hyper-integrated Sector," Centro Sraffa Working Papers CSWP4, Centro di Ricerche e Documentazione "Piero Sraffa".
    10. Sergio Cesaratto, 2008. "The Macroeconomics of the Pension Fund Reform and the case of the TFR reform in Italy," Department of Economics University of Siena 549, Department of Economics, University of Siena.
    11. White, Graham, 2005. "Growth, Autonomous Demand and a Joint-Product Treatment of Fixed Capit al," Working Papers 8, University of Sydney, School of Economics.
    12. Trezzini, Attilio, 2017. "Harrodian Instability: a Misleading Concept," Centro Sraffa Working Papers CSWP24, Centro di Ricerche e Documentazione "Piero Sraffa".
    13. Kalyuzhnova, Yelena & Vagliasindi, Maria, 2006. "Capacity utilization of the Kazakhstani firms and the Russian financial crisis: A panel data analysis," Economic Systems, Elsevier, vol. 30(3), pages 231-248, October.
    14. Sergio Cesaratto, 2012. "Neo-Kaleckian and Sraffian controversies on accumulation theory," Department of Economics University of Siena 650, Department of Economics, University of Siena.
    15. White, Graham, 2012. "The New Keynesian view of aggregate demand: some reflections from a Sraffian standpoint," Working Papers 2012-15, University of Sydney, School of Economics.
    16. Franklin Serrano & Fabio Freitas, 2016. "Growth Rate And Level Effects, The Adjustment Of Capacity To Demand And The Sraffian Supermultiplier," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42ndd Brazilian Economics Meeting] 087, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    17. Attilio Trezzini, 2012. "The Meaning of the Long-Run Ratio of Saving to Social Income," Departmental Working Papers of Economics - University 'Roma Tre' 0151, Department of Economics - University Roma Tre.
    18. Antonella Palumbo, 2008. "I metodi di stima del PIL potenziale tra fondamenti di Teoria economica e Contenuto empirico," Departmental Working Papers of Economics - University 'Roma Tre' 0092, Department of Economics - University Roma Tre.
    19. Emanuele Russo, 2017. "Harrodian instability in decentralized economies: an agent-based approach," LEM Papers Series 2017/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    20. White, Graham, 2008. "Demand-led growth with debt constraints," Working Papers 2008-01, University of Sydney, School of Economics.
    21. Peter Skott, 2016. "Autonomous demand, Harrodian instability and the supply side," UMASS Amherst Economics Working Papers 2016-16, University of Massachusetts Amherst, Department of Economics.
    22. Mark Setterfield, 2017. "Long-run variation in capacity utilization in the presence of a fixed normal rate," Working Papers 1704, New School for Social Research, Department of Economics.
    23. Giovanni Bonifati, 2014. "Investimenti, consumi e occupazione. Capacità produttiva, domanda effettiva e distribuzione del reddito nel lungo periodo," Department of Economics 0046, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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