The Supermultiplier as a Vertically Hyper-integrated Sector

CSWP 4 (July 2014)

Author Óscar Dejuán

Keywords Demand-led growth, multiplier-accelerator models, postKeynesianism

JEL B51, E22, O41

This paper tries to shed new light on demand-led growth from a disaggregated multiplier-accelerator model (the supermultiplier, so to speak). This mechanism was presented as an answer to Harrod’s instability puzzles (Serrano, 1995; Bortis, 1997, Dejuán, 2005). The solution, however, was greeted with suspicion even among Sraffian and postKeynesian economists (Palumbo & Trezzini, 2003; Lavoie, 2010; Smith, 2013). A multisectoral setting of the supermultiplier model, as a variant of Pasinetti’s vertically hyper-integrated sectors, may help to understand its meaning and the mechanisms through which it shapes the structure of the economy until the warranted rate of growth matches the autonomous trend. It also clarifies the limits of the autonomous trend and the conditions for stability in the lines opened by White (2009) and Allain (2013).

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