The paper presents an explicitly dynamic version of the Sraffian supermultiplier growth model in order to analyze its equilibrium path, local stability conditions and dynamic behavior in the neighborhood of equilibrium. This analysis is used to address the criticisms to model found in the literature and also to compare the model with the Cambridge and neo-Kaleckian growth models. The comparative inquiry confirms that the model can be considered a theoretical alternative to the Cambridge and neo-Kaleckian growth models in the analysis of the relationship between economic growth, income distribution and effective demand. The specific closure provided by the supermultiplier growth model allows it to generate a demand-led pattern of economic growth characterized by a tendency towards the normal utilization of productive capacity, while considering income distribution exogenously determined by political, historical and economic forces.
Strong capital inflows and comprehensive trade and financial liberalization characterized the last decade in the majority of Latin American countries. Despite some modest improvement in poverty incidence, the evolution of employment, wages and income distribution has frustrated even the most “Panglossian” of the Washington Consensus’s policy maker that largely run the continent along the last years.
Considering the evolution of household income distribution along the last two decades in Latin America countries an comprehensive analysis observed an asymmetrical pattern of growth with a high income concentration during the “lost decade” of 80’s and a distributive rigidity during a more expansionist phase observed in average in the region along the nineties (Sáinz, and Fuente (2001). But even this evaluation can not be assured since there is a strong underestimation of the income of the richer strata. Due to a disappearance of regular jobs in the continent a polarization process with a hollowing out of middle class and a top-driven increase in inequality seems to be happening in many countries in recent years as a social consequence of the economic and structural changes led by external opening . But unfortunately this performance is not the bottom line. Nowadays an implosive decline is taking place in Argentina with tragic consequences on poverty incidence.