Demand-led growth with debt constraints: a Harrodian perspective
نویسنده
چکیده
The paper explores the implications of different autonomous demands, with differing rates of growth, in a demand-led growth model where policy makers are concerned about the ratios of public sector debt to income and external debt to income. The actual growth rate is explained in terms of the growth rate of aggregate demand, with emphasis in the formation of expectations about growth in the latter; and the relative importance in this regard of realised aggregate demand growth and autonomous demand growth, the latter being governed by export demand and public sector expenditure. Debt constraints specifically, the ratio of public sector debt to output and the ratio of external debt to output – become relevant in the determination of the growth rate of government expenditure. The paper explores the likely interactions between debt constraints, the growth rate of aggregate demand and autonomous demand by means of dynamic simulations. Classification codes: O41, B50, O43, E37
منابع مشابه
Growth, instability and cycles: Harrodian and Kaleckian models of accumulation and income distribution
This paper compares Kaleckian and Harrodian models of accumulation. The simplicity of the canonical Kaleckian model is appealing but more complex Harrodian speci cations are preferable from a behavioral perspective. The local instability of Harrodian-inspired speci cations, moreover, o¤ers a uni ed understanding of both trend and cycles. JEL classi cation: E12, E32, O41
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