IDEAS home Printed from https://ideas.repec.org/a/sae/reorpe/v49y2017i4p652-662.html
   My bibliography  Save this article

A Future for Growth?

Author

Listed:
  • Gerald Friedman

Abstract

Macroeconomics has been constrained by assumptions that the economy tends toward full employment, and longterm growth depends on exogenous factors, productivity, and labor force growth. This discounts effects of demand on the labor force participation and immigration, and on investment and productivity growth. Expansionary fiscal policy and greater effective demand could induce reverse (or benevolent) hysteresis where capacity grows faster with higher employment, investment, and productivity.

Suggested Citation

  • Gerald Friedman, 2017. "A Future for Growth?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(4), pages 652-662, December.
    • Handle: RePEc:sae:reorpe:v:49:y:2017:i:4:p:652-662
    DOI: 10.1177/0486613417717496
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0486613417717496
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0486613417717496?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chirinko, Robert S, 1993. "Business Fixed Investment Spending: Modeling Strategies, Empirical Results, and Policy Implications," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1875-1911, December.
    2. Robert S. Chirinko, 1992. "Business Fixed Investment Spending: A Critical survey of Modeling Strategies, Empirical Results, and Policy Implications," Working Papers 9213, Harris School of Public Policy Studies, University of Chicago.
    3. John McCombie & Maurizio Pugno & Bruno Soro (ed.), 2002. "Productivity Growth and Economic Performance," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-50423-3, October.
    4. Fatás, Antonio & Summers, Lawrence H., 2018. "The permanent effects of fiscal consolidations," Journal of International Economics, Elsevier, vol. 112(C), pages 238-250.
    5. Harry Jerome, 1926. "Migration and Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number jero26-1.
    6. Fatas, Antonio, 2000. "Do Business Cycles Cast Long Shadows? Short-Run Persistence and Economic Growth," Journal of Economic Growth, Springer, vol. 5(2), pages 147-162, June.
    7. Robert E. Hall, 2015. "Quantifying the Lasting Harm to the US Economy from the Financial Crisis," NBER Macroeconomics Annual, University of Chicago Press, vol. 29(1), pages 71-128.
    8. Concetta Castiglione, 2011. "Verdoorn-Kaldor’s Law: an empirical analysis with time series data in the United States," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 1(3), pages 1-8.
    9. Olivier J. Blanchard & Lawrence H. Summers, 1986. "Hysteresis and the European Unemployment Problem," NBER Chapters, in: NBER Macroeconomics Annual 1986, Volume 1, pages 15-90, National Bureau of Economic Research, Inc.
    10. Ofria, Ferdinando & Millemaci, Emanuele, 2010. "Kaldor-Verdoorn’s law and increasing returns to scale: a comparison across developed countries," MPRA Paper 30941, University Library of Munich, Germany.
    11. A. P. Thirlwall, 2015. "A Model of Regional Growth Rate Differences on Kaldorian Lines," Palgrave Studies in the History of Economic Thought, in: Essays on Keynesian and Kaldorian Economics, chapter 12, pages 286-301, Palgrave Macmillan.
    12. Engelbert Stockhammer & Simon Sturn, 2012. "The impact of monetary policy on unemployment hysteresis," Applied Economics, Taylor & Francis Journals, vol. 44(21), pages 2743-2756, July.
    13. Boulier, B L, 1984. "What Lies behind Verdoorn's Law?," Oxford Economic Papers, Oxford University Press, vol. 36(2), pages 259-267, June.
    14. Robert F. Martin & Teyanna Munyan & Beth Anne Wilson, 2014. "Potential Output and Recessions: Are We Fooling Ourselves?," IFDP Notes 2014-11-12, Board of Governors of the Federal Reserve System (U.S.).
    15. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    16. Harry Jerome, 1926. "Appendix to "Migration and Business Cycles"," NBER Chapters, in: Migration and Business Cycles, pages 245-250, National Bureau of Economic Research, Inc.
    17. J. Bradford DeLong & Lawrence H. Summers, 2012. "Fiscal Policy in a Depressed Economy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 233-297.
    18. Assar Lindbeck & Dennis J. Snower, 1989. "The Insider-Outsider Theory of Employment and Unemployment," MIT Press Books, The MIT Press, edition 1, volume 1, number 026262074x, April.
    19. Blanchard, Olivier J. & Summers, Lawrence H., 1987. "Hysteresis in unemployment," European Economic Review, Elsevier, vol. 31(1-2), pages 288-295.
    20. Henrik Jacobsen Kleven, 2014. "How Can Scandinavians Tax So Much?," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 77-98, Fall.
    21. J. Bradford DeLong & Lawrence H. Summers, 2012. "Fiscal Policy in a Depressed Economy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 43(1 (Spring), pages 233-297.
    22. Kleven, Henrik Jacobsen, 2014. "How can Scandinavians tax so much?," LSE Research Online Documents on Economics 66111, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Garga, Vaishali & Singh, Sanjay R., 2021. "Output hysteresis and optimal monetary policy," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 871-886.
    2. Oscar Jorda & Alan Taylor & Sanjay Singh, 2019. "The Long-Run Effects of Monetary Policy," 2019 Meeting Papers 1307, Society for Economic Dynamics.
    3. Engler, Philipp & Tervala, Juha, 2018. "Hysteresis and fiscal policy," Journal of Economic Dynamics and Control, Elsevier, vol. 93(C), pages 39-53.
    4. Patrik Barisic & Tibor Kovac, 2022. "The effectiveness of the fiscal policy response to COVID-19 through the lens of short and long run labor market effects of COVID-19 measures," Public Sector Economics, Institute of Public Finance, vol. 46(1), pages 43-81.
    5. Federico Bassi, 2020. "Chronic Excess Capacity and Unemployment Hysteresis in EU Countries. A Structural Approach," DISCE - Working Papers del Dipartimento di Economia e Finanza def091, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    6. Belke Ansgar, 2018. "Secular Stagnation, Unemployment Hysteresis and Monetary Policy in EMU: Scratches but Not Scars?," The Economists' Voice, De Gruyter, vol. 15(1), pages 1-14, December.
    7. Dave Reifschneider & William Wascher & David Wilcox, 2015. "Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 63(1), pages 71-109, May.
    8. Daniele Girardi & Riccardo Pariboni, 2020. "Autonomous demand and the investment share," Review of Keynesian Economics, Edward Elgar Publishing, vol. 8(3), pages 428-453, July.
    9. Daniel Kienzler & Kai D. Schmid, 2014. "Hysteresis in Potential Output and Monetary Policy," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(4), pages 371-396, September.
    10. Di Domenico, Lorenzo & Gahn, Santiago José & Romaniello, Davide, 2024. "Testing the Waters of Positive Hysteresis: The Effects of Autonomous Demand Shocks on Inflation, Accumulation, and Labor in the US Economy," Centro Sraffa Working Papers CSWP64, Centro di Ricerche e Documentazione "Piero Sraffa".
    11. Váry, Miklós, 2018. "A hiszterézis közgazdasági jelentőségéről posztkeynesi szemléletben [The economic relevance of hysteresis from a post-Keynesian perspective]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 1006-1047.
    12. Paternesi Meloni, Walter & Romaniello, Davide & Stirati, Antonella, 2022. "Inflation and the NAIRU: assessing the role of long-term unemployment as a cause of hysteresis," Economic Modelling, Elsevier, vol. 113(C).
    13. Daniel Kienzler & Kai Daniel Schmid, 2013. "Monetary Policy and Hysteresis in Potential Output," IMK Working Paper 116-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    14. Di Bucchianico, Stefano, 2020. "Discussing Secular Stagnation: A case for freeing good ideas from theoretical constraints?," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 288-297.
    15. Nishi, Hiroshi & Stockhammer, Engelbert, 2020. "Distribution shocks in a Kaleckian model with hysteresis and monetary policy," Economic Modelling, Elsevier, vol. 90(C), pages 465-479.
    16. Ramey, Valerie A., 2020. "Secular stagnation or technological lull?," Journal of Policy Modeling, Elsevier, vol. 42(4), pages 767-777.
    17. Vítor Constâncio, 2020. "The Return of Fiscal Policy and the Euro Area Fiscal Rule," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 358-372, September.
    18. Ulrike Malmendier & Leslie Sheng Shen, 2024. "Scarred Consumption," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(1), pages 322-355, January.
    19. Gilles Saint Paul & Samuel Bentolila, 2000. "Will EMU increase eurosclerosis?," Economics Working Papers 449, Department of Economics and Business, Universitat Pompeu Fabra.
    20. Niels Framroze Møller, 2019. "Decoding unemployment persistence: an econometric framework for identifying and comparing the sources of persistence with an application to UK macrodata," Empirical Economics, Springer, vol. 56(5), pages 1489-1514, May.

    More about this item

    Keywords

    macroeconomics; production; Keynesian economics;
    All these keywords.

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:reorpe:v:49:y:2017:i:4:p:652-662. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.urpe.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.