Sraffian supermultiplier

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Super Haavelmo: balanced and unbalanced budget theorems and the sraffian supermultiplier

This paper extends the analysis of Haavelmo (1945), which derived the multiplier effect of a balanced budget expansion of public spending on aggregate demand and output. We first generalize Haavelmo’s results showing that a fiscal expansion can have positive effects of demand and output even in the case of a relatively small primary surplus and establishing the general principle that what matters for fiscal policy to be expansionary is that the propensity to spend of those taxed should be lower that of the government and the recipients of government transfers. We also show that endogenizing business investment as a propensity to invest makes the traditional balanced budget multiplier to become greater than one. Moreover, if this propensity to invest changes over time and adjusts capacity to demand as in the sraffian supermultiplier demand led growth model, the net tax rate that balances the budget will tend to be lower the…

The Trouble with Harrod: the fundamental instability of the warranted rate in the light of the Sraffian Supermultiplier

The paper discusses Harrod’s “principle of fundamental instability” of growth at the warranted rate, using the Sraffian Supermultiplier model, together with Hicks’s notions of “static” and “dynamic” stability, which are related to the distinction between the direction versus the intensity of a disequilibrium adjustment.

El supermultiplicador sraffiano y el papel de la demanda efectiva en los modelos de crecimiento

La teoría moderna del crecimiento económico tiene su origen en el trabajo de Harrod (1939). Es a partir de los problemas planteados por este autor en ese trabajo que se desenvolvieron las principales líneas de investigación en el área de la teoría del crecimiento económico. Por un lado, del intento de negar la posibilidad de una persistente divergencia entre las tasas garantizada (suponiendo, a priori, que ésta sea igual a la efectiva) y la natural de crecimiento, surgirán los modelos neoclásicos de crecimiento (Ver Cesaratto & Serrano, 2002).