Autonomous and induced demand in the United States: a long-run perspective

Jose A. Pérez-Montiel (), Andreu Sansó, Oguzhan Ozcelebi and Riccardo Pariboni
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Jose A. Pérez-Montiel: University of the Balearic Islands
Oguzhan Ozcelebi: Istanbul University

Journal of Evolutionary Economics, 2023, vol. 33, issue 4, No 8, 1237-1257

Abstract: Abstract This paper presents a long-run study of the relationship between autonomous and induced demand for the United States. Our exercise can be considered a contribution to the burgeoning literature revolving around autonomous demand-led growth models, which have displayed the potential to establish bridges not only within the post-Keynesian community, but also between post-Keynesian economics and other evolutionary and pluralistic approaches to economic growth. In particular, we study the long-run dynamic relationship between autonomous demand – which comprises R&D expenditures, government spending, exports and residential investment – and induced demand. Through a cointegration model with quantile-varying coefficients, we account for the possibility of changes in the relationship between the two variables and demonstrate that the long-run equilibrium relationship between autonomous and induced demand is robust to exogenous shocks and changes in the parameters.

Keywords: Autonomous demand; Induced demand; Autonomous demand-led growth; Supermultiplier; Accounting identity (search for similar items in EconPapers)
JEL-codes: B00 B52 E12 E17 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00191-023-00833-7

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