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Workers' debt-financed consumption: a supermultiplier stock-flow consistent model

Author

Listed:
  • Gabriel Vieira Mandarino

    (Federal University for Latin American Integration (UNILA), Foz do Iguaçu, Brazil)

  • Claudio H. Dos Santos

    (Institute for Applied Economic Research (IPEA), Brasília, Brazil)

  • Antonio Carlos Macedo e Silva

    (Institute of Economics, University of Campinas (UNICAMP), Brazil)

Abstract

This paper presents a supermultiplier stock–flow consistent model of economic growth led by debt-financed consumption of workers. In so doing it tries to shed light on the financial requirements of growth trajectories based on induced investment. The model explicitly derives the aggregate financial needs of both workers and firms and how these needs can be met by the banking sector – mapping out all the stock and flow implications of the assumed financial transactions for all sectors of the economy at hand. An analytic solution for the nature of the steady states of the model is then provided and its dynamic properties analysed by means of computer simulations.

Suggested Citation

  • Gabriel Vieira Mandarino & Claudio H. Dos Santos & Antonio Carlos Macedo e Silva, 2020. "Workers' debt-financed consumption: a supermultiplier stock-flow consistent model," Review of Keynesian Economics, Edward Elgar Publishing, vol. 8(3), pages 339-364, July.
    • Handle: RePEc:elg:rokejn:v:8:y:2020:i:3:p339-364
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    Citations

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    Cited by:

    1. Ryan Woodgate & Eckhard Hein & Ricardo Summa, 2023. "Components of autonomous demand growth and financial feedbacks: Implications for growth drivers and growth regime analysis," Working Papers PKWP2307, Post Keynesian Economics Society (PKES).
    2. Pedrosa, Ítalo & Brochier, Lídia & Freitas, Fabio, 2023. "Debt hierarchy: Autonomous demand composition, growth and indebtedness in a Supermultiplier model," Economic Modelling, Elsevier, vol. 126(C).
    3. Nomaler, Önder & Spinola, Danilo & Verspagen, Bart, 2020. "Schumpeter and Keynes: Economic growth in a super-multiplier model," MERIT Working Papers 2020-049, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Joana David Avritzer, 2022. "Debt-led growth and its financial fragility: An investigation into the dynamics of a supermultiplier model," PSL Quarterly Review, Economia civile, vol. 75(302), pages 241-262.

    More about this item

    Keywords

    supermultiplier; stock–flow consistent approach; workers’ debt-financed consumption;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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