Permanent Demand and Private Investment in the General theory: an empirical investigation

Jose A. Pérez Montiel, Carles Manera Erbina

Resumen


We empirically test some Keynes’ (and post Keynesians’) assertions relative to the multiplier-accelerator principle. By means of the nonlinear causality test proposed by Diks and Wolski (2016), we conclude that in the United States domestic private investment is driven by permanent demand. We explain that this result is consistent with Keynes’s principle of effective demand in the long run. We hope this paper helps consolidating the potential consensus among Keynesian, Kaleckian and Sraffian economists initiated by the work of Allain (2015).


Palabras clave


Permanent demand; Supermultiplier; Economic dynamics

Texto completo:

PDF           Cómo citar un elemento

Referencias


Ajmi, A.N.; Aye, G.C.; Balcilar, M. and Gupta, R (2015): “Causality between Exports and Economic Growth in South Africa: Evidence from Linear and Nonlinear Tests”, The Journal of Developing Areas 49(2):163–81.

Allain, O. (2015): “Tackling the Instability of Growth: A Kaleckian-Harrodian Model with an Autonomous Expenditure Component”, Cambridge Journal of Economics 39(5):1351–71.

Allain, O. (2019): “Demographic Growth, Harrodian (in)Stability and the Supermultiplier”, Cambridge Journal of Economics 43(1):85–106.

Baek, E.G. and Brock, W.A. (1992): “A Nonparametric Test for Independence of a Multivariate Time Series”, Statistica Sinica 2:137–56.

Bortis, H. (1997): Institutions, Behaviour, and Economic Theory : A Contribution to Classical-Keynesian Political Economy, Cambridge University Press.

Brock, W.A.; Hsieh, D.A. and LeBaron, B.D. (1991): Nonlinear Dynamics, Chaos, and Instability : Statistical Theory and Economic Evidence, MIT Press.

Broock, W.; Scheinkman, J.A.; Dechert, W.D. and LeBaron, B. (1996): “A Test for Independence Based on the Correlation Dimension”, Econometric Reviews 15(3):197–235.

Cesaratto, S. (2015): “Neo-Kaleckian and Sraffian Controversies on the Theory of Accumulation”, Review of Political Economy 27(2):154–82.

Cesaratto, S.; Serrano, F. and Stirati, A. (2003): “Technical Change, Effective Demand and Employment”, Review of Political Economy 15(1):33–52.

Dávila-Fernández, M.J.; Oreiro, J.L. and Punzo, L.F. (2017): “Inconsistency and Over-Determination in Neo-Kaleckian Growth Models: A Note”, Metroeconomica.

Dejuan, O. (2005): “Paths of Accumulation and Growth: Towards a Keynesian Long-Period Theory of Output”, Review of Political Economy 17(2):231–52.

Dejuán, O. (2017): “Hidden Links in the Warranted Rate of Growth: The Supermultiplier Way Out”, The European Journal of the History of Economic Thought 24(2):369–94.

Diks, C. and DeGoede, J. (2001): “A General Nonparametric Bootstrap Test for Granger Causality”, in Global analysis of dynamical systems : festschrift dedicated to Floris Takens for his 60th birthday, edited by F. Takens, H. W. (Hendrik W. Broer, B. Krauskopf, and G. Vegter, Institute of Physics Pub.

Diks, C. and Wolski, M. (2016): “Nonlinear Granger Causality: Guidelines for Multivariate Analysis”, Journal of Applied Econometrics 31(7):1333–51.

Eatwell, J. (1983): “The Long-Period Theory of Employment”, Cambridge Journal of Economics 7:269–85.

Elliott, G.; Rothenberg, T.J. and Stock, J.H. (1996): “Efficient Tests for an Autoregressive Unit Root”, Econometrica 64(4):813.

Engle, R.F. and Granger, C.W.J. (1987): “Co-Integration and Error Correction: Representation, Estimation, and Testing”, Econometrica 55(2):251.

Fagundes, L. and Freitas, F. (2017): The Role of Autonomous Non-Capacity Creating Expenditures in Recent Kaleckian Growth Models: An Assessment from the Perspective of the Sraffian Supermultiplier.

Fang, Z. and Wolski, M. (2019): “Human Capital, Energy and Economic Growth in China: Evidence from Multivariate Nonlinear Granger Causality Tests”, Empirical Economics 1–26.

Fiebiger, B. and Lavoie, M. (2019): “Trend and Business Cycles with External Markets: Non-capacity Generating Semi-autonomous Expenditures and Effective Demand”, Metroeconomica 70(2):247–62.

Freitas, F. and Serrano, F. (2015): “Growth Rate and Level Effects, the Stability of the Adjustment of Capacity to Demand and the Sraffian Supermultiplier”, Review of Political Economy 27(3):258–81.

Gallo, E. (2019): Investment, Autonomous Demand and Long Run Capacity Utilization: An Empirical Test for the Euro Area.

Girardi, D. and Pariboni, R. (2016): “Long-Run Effective Demand in the US Economy: An Empirical Test of the Sraffian Supermultiplier Model”, Review of Political Economy 28(4):523–44.

Haluska, G., Braga, J. and Summa, R. (2019): Growth, Investment Share and the Stability of the Sraffian Supermultiplier Model in the United States Economy (1985-2017), Rio de Janeriro.

Harrod, R. F. (1939): “An Essay in Dynamic Theory”, The Economic Journal 49(193):14–33.

Hicks, JR. (1950): A Contribution to the Theory of the Trade Cycle, Oxford University Press.

Hiemstra, C. and Jones, J. (1994): “Testing for Linear and Nonlinear Granger Causality in the Stock Price-Volume Relation”, The Journal of Finance 49(5):1639–64.

Johansen, S. (1995): Likelihood-Based Inference in Cointegrated Vector Autoregressive Models, Oxford University Press.

Jun Nah, W. and Lavoie, M. (2019): “Convergence in a Neo-Kaleckian Model with Endogenous Technical Progress and Autonomous Demand Growth”, Review of Keynesian Economics 7(3):275–91.

Keynes, J.M.; Moggridge, D.E. and Johnson E.S. (1971): The Collected Writings of John Maynard Keynes.

Keynes, J.M. (1936): The General Theory of Employment, Interest, and Money, Macmillan: London.

Kwiatkowski, D.; Phillips, P.C.B.; Schmidt, P. and Shin, Y. (1992): “Testing the Null Hypothesis of Stationarity against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?” Journal of Econometrics 54(1–3):159–78.

Lavoie, M. (2016): “Convergence towards the Normal Rate of Capacity Utilization in Neo-Kaleckian Models: The Role of Non-Capacity Creating Autonomous xpenditures”, Metroeconomica 67(1):172–201.

Lavoie, M. (2017): “Prototypes, Reality and the Growth Rate of Autonomous Consumption Expenditures: A Rejoinder”, Metroeconomica 68(1):194–99.

Ng, S. and P. Perron (2001): “LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power”, Econometrica 69(6):1519–54.

Nikiforos, M. (2018): “Some Comments on the Sraffian Supermultiplier Approach to Growth and Distribution”, Journal of Post Keynesian Economics 41(4):659–75.

Ohlin, B.G. (1934): Penningpolitik, Offentliga Arbeten, Subventioner Och Tullar Som Medel Mot Arbetslöshet: Bidrag till Expansionens Teori, 4th ed. Kungl. Boktryckeriet, PA Norstedt.

Panchenko, V. (2006): “A New Statistic and Practical Guidelines for Nonparametric Granger Causality Testing”, Journal of Economic Dynamics and Control 30(9–10):1647–69.

Pariboni, R. (2016): “Household Consumer Debt, Endogenous Money and Growth: A Supermultiplier-Based Analysis”, PSL Quarterly Review, 69(278).

Pérez-Montiel, J.A.; Dejuán Asenjo, O. and Manera Erbina, C. (2019): A Harrodian Model That Fits the Tourism-Led Growth Hypothesis for TourismBased Economies, Palma de Mallorca.

Pérez-Montiel, J.A. and Dejuán, O. (2019): Tackling Harrodian Instability. A Criticism of Some Recent Demand-Led Growth Models, Palma.

Pérez-Montiel, J.A. and Manera, C. (2020): “Autonomous Expenditures and Induced Investment. A Panel Test of the Sraffian Supermultiplier Model in European Countries”, Review of Keynesian Economics 8(2).

Pesaran, M.H.; Shin, Y. and Smith, R.J. (2001): “Bounds Testing Approaches to the Analysis of Level Relationships”, Journal of Applied Econometrics 16(3):289–326.

Phillips, P.C.B. and Perron, P. (1988): “Testing for a Unit Root in Time Series Regression”, Biometrika 75(2):335–46.

Qiao, Z.; M. McAleer and W.K. Wong (2009): “Linear and Nonlinear Causality between Changes in Consumption and Consumer Attitudes”, Economics Letters 102(3):161–64.

Said, E. and Dickey, D.A. (1984): “Testing for Unit Roots in Autoregressive-Moving Average Models of Unknown Order”, Biometrika 71(3):599–607.

Samuelson, P. (1939): “Interactions between the Multiplier Analysis and the Principle of Acceleration”, The Review of Economics and Statistics 21(2):75–78.

Serrano, F. (1995): “Long Period Efective Demand and the Sraffian Supermultiplier”, Contributions to Political Economy 14(1):67–90.

Serrano, F. and Freitas, F. (2017): “The Sraffian Supermultiplier as an Alternative Closure for Heterodox Growth Theory”, European Journal of Economics and

Economic Policies: Intervention 14(1):70–91.

Serrano, F.; Freitas, F. and Bhering, G. (2018): “The Trouble with Harrod: The Fundamental Instability of the Warranted Rate in the Light of the Sraffian Supermultiplier”, Metroeconomica.

Skott, P. (2017a): “Autonomous Demand, Harrodian Instability and the Supply Side”, Metroeconomica.

Skott, P. (2017b): “Autonomous Demand and the Harrodian Criticisms of the Kaleckian Model”, Metroeconomica 68(1):185–93.

Smith, M. (2012): “Demand-Led Growth Theory: A Historical Approach”, Review of Political Economy 24(4):543–73.

Toda, H.Y. and Yamamoto, T. (1995): “Statistical Inference in Vector Autoregressions with Possibly Integrated Processes”, Journal of Econometrics 66(1–2):225–50.

Vercelli, A. and Sordi, S. (2009): Genesis and Evolution of the MultiplierAccelerator Model in the Years of High Theory.




DOI: http://dx.doi.org/10.33776/rem.v0i54.3835

Enlaces refback

  • No hay ningún enlace refback.




Copyright (c) 2020



e-ISSN:2340-4264   -   ISSN: 1576-0162

Entidad editoraUniversidad de Huelva. Servicio de Publicaciones.

Licencia de usoCreative Commons 4.0