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Growth without normal capacity utilization

Antonella Palumbo and Attilio Trezzini (attilio.trezzini@uniroma3.it)

The European Journal of the History of Economic Thought, 2003, vol. 10, issue 1, 109-135

Abstract: Within the demand-led approach to growth, the long-period tendencies of quantities cannot be effectively studied through theoretical positions entailing normal utilization of capacity. Whether in the form of constant or of average normal utilization, this assumption contradicts the supposed autonomy of aggregate demand. Analysis of the operation of the adjustment of capacity to demand suggests that potentially offsetting forces make fully adjusted positions irrelevant. As quantities cannot be assumed to gravitate towards such positions, the relations between quantity variables determined on the normal utilization hypothesis provide a poor guide to the analysis of reality.

Keywords: Growth; Capacity Utilization; Keynesian Long-period Analysis; Accumulation (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (45)

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DOI: 10.1080/0967256032000043814

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