Demand-led growth with debt constraints
The paper explores the implications of different autonomous demands, with differing rates of growth, in a demand-led growth model where policy makers are concerned about the ratios of public sector debt to income and external debt to income. The actual growth rate is explained in terms of the growth rate of aggregate demand, with emphasis in the formation of expectations about growth in the latter; and the relative importance in this regard of realised aggregate demand growth and autonomous demand growth, the latter being governed by export demand and public sector expenditure. Debt constraints - specifically, the ratio of public sector debt to output and the ratio of external debt to output - become relevant in the determination of the growth rate of government expenditure. The paper explores the likely interactions between debt constraints, the growth rate of aggregate demand and autonomous demand by means of dynamic simulations.
|Date of creation:||Dec 2008|
|Date of revision:|
|Contact details of provider:|| Postal: Sydney, NSW 2006|
Phone: 61 +2 9351 5055
Fax: 61 +2 9351 4341
Web page: http://sydney.edu.au/arts/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- 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.
- Neri Salvadori, 2004. "Economic growth and distribution: on the nature and causes of the wealth of nations," Economics Bulletin, AccessEcon, vol. 28(18), pages A0.
- Graham White, 2008. "Growth, Autonomous Demand And A Joint-Product Treatment Of Fixed Capital," Metroeconomica, Wiley Blackwell, vol. 59(1), pages 1-26, 02.
- Nelson H. Barbosa-Filho, 1999. "A Note on the Theory of Demand-Led Growth," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 1999-06, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
When requesting a correction, please mention this item's handle: RePEc:syd:wpaper:2123/7068. 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: (Vanessa Holcombe)
If references are entirely missing, you can add them using this form.