 Demand-led Growth Theory: A Historical ApproachReview of Political Economy, 2012, vol. 24, issue 4, 543-573 Abstract: This paper builds upon the Keynesian theory of demand-led growth in order to provide an analytical framework for explaining economic growth and development in concrete terms, consistent with the fundamental idea that growth in output and employment is determined by the growth in aggregate demand. The framework employs a historical approach to identify the main factors and their role in explaining demand-led growth and the accumulation process. The theoretical model developed abandons steady-state conditions by proposing that capacity utilisation varies in the long run as well as in the short run to ensure output has the elasticity to accommodate levels of autonomous demand free of any capacity saving constraint. On the basis of our analytical framework, the paper considers the main factors that explain the growth in aggregate demand: first, by examining the variables that determine the ‘super-multiplier’ and what social, institutional and technical conditions can cause its value to change over time; second, by identifying the components of autonomous demand and the main forces explaining their growth; and third, by considering the manner in which technical progress promotes demand-led growth. Date: 2012 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:revpoe:v:24:y:2012:i:4:p:543-573 Ordering information: This journal article can be ordered from DOI: 10.1080/09538259.2012.729931 Access Statistics for this article Review of Political Economy is currently edited by Steve Pressman and Louis-Philippe Rochon More articles in Review of Political Economy from Taylor & Francis Journals |
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