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Hidden links in the warranted rate of growth: the supermultiplier way out

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  • Óscar Dejuán

Abstract

Post Keynesian models consider growth to be demand-led – a logical consequence of Keynes's principle of effective demand. After Harrod's seminal paper in 1939 they try to unearth the hidden variables that might allow the adaptation of the warranted rate, determined from the supply side, to demand-growth expectations that supposedly have an autonomous source. The purpose of this paper is to show that an investment function based on the accelerator and integrated in a supermultiplier is able to shape the warranted rate in consonance with the autonomous trend. The supermultiplier reveals itself as a stable and stabilising mechanism when demand is split into permanent and transient. Hopefully the paper will build bridges with other Keynesian, Kaleckian and Sraffian strands that have so far dismissed the supermultiplier solution because of its apparently inherent instability.

Suggested Citation

  • Óscar Dejuán, 2017. "Hidden links in the warranted rate of growth: the supermultiplier way out," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 24(2), pages 369-394, March.
    • Handle: RePEc:taf:eujhet:v:24:y:2017:i:2:p:369-394
    DOI: 10.1080/09672567.2016.1186201
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    1. Pierangelo Garegnani, 2024. "Notes on Consumption, Investment and Effective Demand: II," Springer Studies in the History of Economic Thought, in: Roberto Ciccone (ed.), Capital Theory, the Surplus Approach, and Effective Demand, pages 411-434, Springer.
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