Schumpeter and Keynes: Economic growth in a super-multiplier model

Önder Nomaler (), Danilo Spinola () and Bart Verspagen
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Önder Nomaler: UNU-MERIT
Danilo Spinola: UNU-MERIT, Maastricht University

No 2020-049, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: We present a model of economic growth that is based on Keynesian ideas (the role of autonomous demand in economic growth) as well as Schumpeterian notions (technological change). Our model fits in the Sraffian supermultiplier (SSM) tradition, and we endogenise the growth rate of autonomous demand, and semi-endogenise productivity growth. The basic model has a steady state that is consistent with a stable employment rate. Consumption smoothing (between periods of high and low employment) by workers is the mechanism that keeps the growing economy stable. We also introduce a version of the model where the burden for stabilisation falls upon government fiscal policy. This also yields a stable growth path, although the parameter restrictions for stability are more demanding in this case.

Keywords: Economic growth model; Sraffian supermultiplier; Research and Development; R&D; Keynesian theory; Technological change (search for similar items in EconPapers)
JEL-codes: E11 E12 E62 O31 O33 O41 (search for similar items in EconPapers)
Date: 2020-11-06
New Economics Papers: this item is included in nep-gro, nep-ino, nep-mac, nep-pke and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2020049

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