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Autonomous and induced demand in the United States: a long-run perspective

Author

Listed:
  • Jose A. Pérez-Montiel

    (University of the Balearic Islands)

  • Andreu Sansó

    (University of the Balearic Islands)

  • Oguzhan Ozcelebi

    (Istanbul University)

  • Riccardo Pariboni

    (University of Siena)

Abstract

This paper presents a long-run study of the relationship between autonomous and induced demand for the United States. Our exercise can be considered a contribution to the burgeoning literature revolving around autonomous demand-led growth models, which have displayed the potential to establish bridges not only within the post-Keynesian community, but also between post-Keynesian economics and other evolutionary and pluralistic approaches to economic growth. In particular, we study the long-run dynamic relationship between autonomous demand – which comprises R&D expenditures, government spending, exports and residential investment – and induced demand. Through a cointegration model with quantile-varying coefficients, we account for the possibility of changes in the relationship between the two variables and demonstrate that the long-run equilibrium relationship between autonomous and induced demand is robust to exogenous shocks and changes in the parameters.

Suggested Citation

  • Jose A. Pérez-Montiel & Andreu Sansó & Oguzhan Ozcelebi & Riccardo Pariboni, 2023. "Autonomous and induced demand in the United States: a long-run perspective," Journal of Evolutionary Economics, Springer, vol. 33(4), pages 1237-1257, September.
    • Handle: RePEc:spr:joevec:v:33:y:2023:i:4:d:10.1007_s00191-023-00833-7
    DOI: 10.1007/s00191-023-00833-7
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    More about this item

    Keywords

    Autonomous demand; Induced demand; Autonomous demand-led growth; Supermultiplier; Accounting identity;
    All these keywords.

    JEL classification:

    • B00 - Schools of Economic Thought and Methodology - - General - - - History of Economic Thought, Methodology, and Heterodox Approaches
    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • 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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