EconPapers    
Economics at your fingertips  
 

A Supermultiplier Stock-Flow Consistent model: the return of the paradoxes of thrift and costs in the long run?

Lidia Brochier () and Antonio Carlos Macedo e Silva

MPRA Paper from University Library of Munich, Germany

Abstract: Supermultiplier models have been recently brought to the post-Keynesian debate. Yet these models still rely on quite simple economic assumptions, being mostly ow models which omit the �nancial determinants of autonomous expenditures. Since the output growth rate converges in the long run to the exogenously given growth rate of \non-capacity creating" autonomous expenditure and the utilization rate moves towards the normal utilization rate, the paradoxes of thrift and costs remain valid only as level e�ects (average growth rates). This paper investigates whether the core conclusions of supermultiplier models hold in a more complex economic framework, described by means of a supermultiplier SFC model, in which private business investment is assumed to be completely induced by income while the autonomous expenditure component - in this case consumption out of wealth - becomes endogenous. The results of the numerical simulation experiments suggest that the paradox of thrift can remain valid in terms of growth e�ects and that a lower pro�t share can also be associated to a higher accumulation rate, though with a lower pro�t rate.

Keywords: Supermultiplier; SFC model; autonomous expenditures; paradoxes of thrift and costs; growth theories. (search for similar items in EconPapers)
JEL-codes: B59 E11 E12 E25 O41 (search for similar items in EconPapers)
Date: 2017-03-21
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Forthcoming in Cambridge Journal of Economics Advanced Access (2018): pp. 1-30

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/92673/1/MPRA_paper_92673.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92673

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2019-05-10
Handle: RePEc:pra:mprapa:92673