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Keynes after Sraffa and Kaldor: Effective demand, accumulation and productivity growth

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  • Alcino F. Camara-Neto and Matías Vernengo

Abstract

This paper analyzes to what extent John Maynard Keynes was successful in showing that the economic system tends to fluctuate around a position of equilibrium below full employment in the long run. It is argued that a successful extension of Keyness principle of effective demand to the long run requires the understanding of the contributions by Piero Sraffa and Nicholas Kaldor. Sraffa provides the basis for the proper dismissal of the natural rate of interest, while the incorporation by Kaldor of the supermultiplier and Verdoorns Law allows for a theory of the rate of change of the capacity limit of the economy.

Suggested Citation

  • Alcino F. Camara-Neto and Matías Vernengo, 2010. "Keynes after Sraffa and Kaldor: Effective demand, accumulation and productivity growth," Working Paper Series, Department of Economics, University of Utah 2010_07, University of Utah, Department of Economics.
    • Handle: RePEc:uta:papers:2010_07
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    References listed on IDEAS

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    1. Nicholas Kaldor, 1955. "Alternative Theories of Distribution," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 23(2), pages 83-100.
    2. Paul Davidson, 1992. "International Money and the Real World," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-0-230-37809-4, March.
    3. A. P. Thirlwall, 2015. "A Model of Regional Growth Rate Differences on Kaldorian Lines," Palgrave Studies in the History of Economic Thought, in: Essays on Keynesian and Kaldorian Economics, chapter 12, pages 286-301, Palgrave Macmillan.
    4. Ray C. Fair, 2000. "Testing the NAIRU Model for the United States," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 64-71, February.
    5. Magnus Blomström & Robert E. Lipsey & Mario Zejan, 1996. "Is Fixed Investment the Key to Economic Growth?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(1), pages 269-276.
    6. Geoff Tily, 2006. "Keynes's theory of liquidity preference and his debt management and monetary policies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(5), pages 657-670, September.
    7. Colander, David, 1984. "Was Keynes a Keynesian or a Lernerian?," Journal of Economic Literature, American Economic Association, vol. 22(4), pages 1572-1575, December.
    8. Edward J. Nell & Willi Semmler (ed.), 1991. "Nicholas Kaldor and Mainstream Economics," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-10947-0, December.
    9. Serrano, Franklin, 1995. "Long Period Effective Demand and the Sraffian Supermultiplier," Contributions to Political Economy, Cambridge Political Economy Society, vol. 14(0), pages 67-90.
    10. Matias Vernengo, 2001. "Sraffa, Keynes and 'The Years of High Theory'," Review of Political Economy, Taylor & Francis Journals, vol. 13(3), pages 343-354.
    11. Edward J. Amadeo, 1989. "Keynes’s Principle of Effective Demand," Books, Edward Elgar Publishing, number 11.
    12. Yongbok Jeon & Matías Vernengo, 2008. "Puzzles, Paradoxes, and Regularities: Cyclical and Structural Productivity in the United States (1950–2005)," Review of Radical Political Economics, Union for Radical Political Economics, vol. 40(3), pages 237-243, September.
    13. Matias Vernengo & Louis-Philippe Rochon, 2001. "Kaldor and Robinson on money and growth," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 8(1), pages 75-103.
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    Cited by:

    1. Matías Vernengo, 2011. "The return of vulgar economics: A Rejoinder to Colander, Holt and Rosser," Working Paper Series, Department of Economics, University of Utah 2011_14, University of Utah, Department of Economics.
    2. Sergio Cesaratto, 2012. "Neo-Kaleckian and Sraffian controversies on accumulation theory," Department of Economics University of Siena 650, Department of Economics, University of Siena.
    3. Esteban Pérez Caldentey & Matías Vernengo, 2016. "Reading Keynes in Buenos Aires: Prebisch and the Dynamics of Capitalism," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(6), pages 1725-1741.

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    More about this item

    Keywords

    History of Macroeconomic Thought; Macroeconomic Models;

    JEL classification:

    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General

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