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Accomulation of capital

Author

Listed:
  • Pierangelo Garegnani
  • Antonella Palumbo

Abstract

The paper deals with the ‘Keynesian’ theories of accumulation, i.e. those sharing the premise that in the long period, no less than in the short, it is investment that generates the corresponding amount of savings, and thus aggregate demand what ultimately determines growth. The Distribution-based Long-period Keynesian Approach, which is synthesized in the Cambridge equation and which maintains that adjustment of savings to investments comes about through changes in distribution between wages and profits, is shown to be founded on the doubtful premise that long-period output is basically inelastic to changes in demand. The long-period changes in the amount of capacity, together with the possibility that capacity utilization differs from normal also in the long period, entail that adjustment of saving may occur through changes in the level of aggregate output, without any need of changes in distribution, as is maintained in the Output-based Long-period Keynesian Approach.

Suggested Citation

  • Pierangelo Garegnani & Antonella Palumbo, 1997. "Accomulation of capital," Departmental Working Papers of Economics - University 'Roma Tre' 0002, Department of Economics - University Roma Tre.
  • Handle: RePEc:rtr:wpaper:0002
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    File URL: http://dipeco.uniroma3.it/public/WP%202%20Garegnani%20Palumbo%2097.pdf
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    Citations

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    Cited by:

    1. Matthew Smith, 2012. "Demand-led Growth Theory: A Historical Approach," Review of Political Economy, Taylor & Francis Journals, vol. 24(4), pages 543-573, October.
    2. 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.
    3. Ginzburg, Andrea & Simonazzi, Annamaria, 2005. "Patterns of industrialization and the flying geese model: the case of electronics in East Asia," Journal of Asian Economics, Elsevier, vol. 15(6), pages 1051-1078, January.
    4. White, Graham, 2005. "Growth, Autonomous Demand and a Joint-Product Treatment of Fixed Capit al," Working Papers 8, University of Sydney, School of Economics.
    5. 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 -.
    6. Fabio Petri, 2009. "On the Recent Debate on Capital Theory and General Equilibrium," Department of Economics University of Siena 568, Department of Economics, University of Siena.
    7. Fabio Petri, 2013. "Neglected implications of neoclassical capital-labour substitution for investment theory:another criticism of Say's Law," Department of Economics University of Siena 687, Department of Economics, University of Siena.
    8. Sergio Cesaratto & Franklin Serrano & Antonella Stirati, 2003. "Technical Change, Effective Demand and Employment," Review of Political Economy, Taylor & Francis Journals, vol. 15(1), pages 33-52.

    More about this item

    Keywords

    Aggregate demand; growth; Cambridge equation; Keynesian premise; capacity utilization; long-period elasticity of output;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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