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A supermultiplier model with two non-capacity-generating semi-autonomous demand components

Author

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  • Olivier Allain

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

According to supermultiplier models, economic dynamics are driven by the dynamics of non-capacity-generating autonomous demand components. Since the literature suggests several candidates for these components (government expenditures, credit-financed consumption, private residential investments, etc.), it is necessary to analyze how two (or more) autonomous components can coexist, which is the purpose of the theoretical model, conceptual discussion and simulation exercises presented herein. Because no more than one component can remain exogenous in the long run, either the other component(s) must adjust endogenously, or all the components adjust to each other. In the latter case, the long-run growth rate becomes path dependent, a new finding in the literature on supermultiplier models. Furthermore, while the label ‘autonomous’ becomes questionable for qualifying demand components, we argue that they should not be considered induced either, leading us to opt for the ‘semi-autonomous’ label suggested by Fiebiger (2018, 2020) and Fiebiger and Lavoie (2019).
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Olivier Allain, 2022. "A supermultiplier model with two non-capacity-generating semi-autonomous demand components," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03887945, HAL.
    • Handle: RePEc:hal:cesptp:hal-03887945
    DOI: 10.1016/j.strueco.2022.09.008
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    Cited by:

    1. Emboava Vaz, João, 2024. "Impacts of US interest rates on growth, income distribution, and macroeconomic policy space in developing countries: A SFC supermultiplier model," IPE Working Papers 228/2024, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    2. Pedrosa, Ítalo & Brochier, Lídia & Freitas, Fabio, 2023. "Debt hierarchy: Autonomous demand composition, growth and indebtedness in a Supermultiplier model," Economic Modelling, Elsevier, vol. 126(C).
    3. Pérez-Montiel, José A. & Sansó, Andreu, 2025. "Different specifications and implications of the supermultiplier model," Structural Change and Economic Dynamics, Elsevier, vol. 74(C), pages 963-969.

    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)

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