Investment and Saving in a Dynamic Context: The Contributions of Athanasios (Tom) Asimakopulos

Claudio Sardoni ()

Review of Political Economy, 2019, vol. 31, issue 2, 233-246

Abstract: In the 1980s, Asimakopulos criticized both Kalecki and Keynes for the way they dealt with the problem of the investment multiplier. Kalecki's and Keynes's insufficient attention to the time dimension of the multiplier process led them to overlook some aspects of the relation between saving and investment and underestimate the importance of financing investment, especially with regard to the problem of the conversion of the firms' short-term loans into long-term loans. The paper looks at these problems by carrying out the analysis in a more formal way than Asimakopulos did. In a dynamic analytical context which takes explicit account of the time dimension of processes, the economy's propensity to save can affect investment through its effect on the long-term interest rate. Acknowledging this, however, does not imply the rejection of the view that investment ‘comes first’: it is not saving that determines investment, but the other way around.

Date: 2019
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DOI: 10.1080/09538259.2019.1662144

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