 A Dynamic Approach to the Theory of Effective DemandAnwar Shaikh () Chapter 14 in Profits, Deficits and Instability, 1992, pp 271-294 from Palgrave Macmillan Abstract: Abstract This chapter attempts to re-situate the theory of effective demand within a dynamic non-equilibrium context. Existing theories of effective demand, which derive from the works of Keynes and Kalecki, are generally posed in static equilibrium terms. That is to say, they serve to define a given level of output which corresponds to the equilibrium point between aggregate demand and supply. We propose to generalise this analysis in three ways. First, we shall extend the analysis to encompass a dynamic, that is, moving short-run path of output, rather than a merely static level. Second, we shall show that this dynamic short-run path need not imply an equilibrium analysis, since it can arise from either stochastically sustained cycles or deterministic limit cycles.1 And third, we will provide generalisation of the theory of effective demand and a possible solution in the instability of warranted growth. Keywords: Profit Margin; Aggregate Demand; Capacity Utilisation; Excess Demand; Fixed Capital (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-11786-4_14 Ordering information: This item can be ordered from DOI: 10.1007/978-1-349-11786-4_14 Access Statistics for this chapter More chapters in Palgrave Macmillan Books from Palgrave Macmillan |
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