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Endogenous Growth: A Kaldorian Approach

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  • Mark Setterfield

    () (Department of Economics, Trinity College)

Abstract

This chapter explores the Kaldorian approach to endogenous growth theory. The central principles of this approach are explored, including the claims that growth is: (a) demandled, with trade playing a central role in aggregate demand formation; and (b) pathdependent. It is shown that both the actual and natural rates of growth are path dependent in the Kaldorian tradition. The implications of inequality between the actual and natural rates of growth are investigated, and it is shown that mechanisms exist within the Kaldorian tradition that are capable of reconciling these growth rates. This results in the sustainability (in principle) of any particular equilibrium value of the actual rate of growth.

Suggested Citation

  • Mark Setterfield, 2010. "Endogenous Growth: A Kaldorian Approach," Working Papers 1001, Trinity College, Department of Economics.
  • Handle: RePEc:tri:wpaper:1001
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    File URL: http://internet2.trincoll.edu/repec/WorkingPapers2010/wp10-01.pdf
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    References listed on IDEAS

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    1. Carlin, Wendy & Glyn, Andrew & Van Reenen, John, 2001. "Export Market Performance of OECD Countries: An Empirical Examination of the Role of Cost Competitiveness," Economic Journal, Royal Economic Society, vol. 111(468), pages 128-162, January.
    2. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    3. Kaldor, Nicholas, 1970. "The Case for Regional Policies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 17(3), pages 337-348, November.
    4. Thomas I. Palley, 2002. "Economic contradictions coming home to roost? Does the U.S. economy face a long-term aggregate demand generation problem?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 25(1), pages 9-32.
    5. Robert A. Blecker, 2009. "Long-Run Growth in Open Economies: Export-Led Cumulative Causation or a Balance-of-Payments Constraint?," Working Papers 2009-23, American University, Department of Economics.
    6. Mark Setterfield, 2006. "Balancing the Macroeconomic Books on the Backs of Workers: A Simple Analytical Political Economy Model of Contemporary U.S. Capitalism," International Journal of Political Economy, Taylor & Francis Journals, vol. 35(3), pages 46-63.
    7. Setterfield, Mark, 1997. "'History versus Equilibrium' and the Theory of Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 21(3), pages 365-378, May.
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    Cited by:

    1. repec:eee:streco:v:42:y:2017:i:c:p:67-75 is not listed on IDEAS
    2. Fabrício Misso & Ricardo Araújo Azevedo & Frederico Jayme Jr, 2013. "An extended structural economic dynamics approach to balance-of-payments constrained growth: level of the real exchange rate and endogenous elasticities," Textos para Discussão Cedeplar-UFMG 499, Cedeplar, Universidade Federal de Minas Gerais.
    3. Araujo, Ricardo Azevedo, 2013. "Cumulative causation in a structural economic dynamic approach to economic growth and uneven development," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 130-140.
    4. repec:voj:journl:v:64:y:2017:i:2:p:139-168 is not listed on IDEAS
    5. Araujo, Ricardo Azevedo & Trigg, Andrew B., 2015. "A neo-Kaldorian approach to structural economic dynamics," Structural Change and Economic Dynamics, Elsevier, vol. 33(C), pages 25-36.
    6. Araujo, Ricardo, 2013. "Assessing the Dynamics of Terms of Trade in a Model of Cumulative Causation and Structural Change," MPRA Paper 46049, University Library of Munich, Germany.

    More about this item

    Keywords

    endogenous growth; Kaldor; path dependence; demand-led growth; technical change; institutions; natural rate of growth;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian

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