Some notes on Long-Run capacity utilisation, steady state and induced investment

Attilio Trezzini ()

No 10, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: The steady-state method of analysing long-run economic tendencies is inconsistent with accurate representation of the autonomous role played by aggregate demand in the growth process. This role implies long-run variability of capacity utilization, which is denied by assumption in steady-state models. As Kaleckian analyses of growth seek to represent this role of aggregate demand expansion by means of steady-state models, the clash between the two features generates an obvious contradiction. Kaleckians recognise this contradiction but fail to identify its true origin and attempt to deal with it by modifying their models.

Keywords: Demand-led Growth; Capacity Utilisation (search for similar items in EconPapers)
JEL-codes: E12 O40 (search for similar items in EconPapers)
Pages: 25
Date: 1998-12
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