The paper moves in a theoretical context in which the level of economic activity is dependent on aggregate demand in the long as well as in the short run. The paper shows that given two simple hypotheses the economic system will tend to grow regardless of what happens to the average level of investment over time. The two simple hypotheses are a) that the marginal propensity to consume of the community is lower when the income contracts in the slumps than it is when income increases and b) that investment oscillates over time. These two assumptions are sufficient to identify a source of economic growth which is endogenous to the system.
Garegnani, P., Trezzini, A. (2004). "Cycles and Growth: A Note on Development in a Market Economy" presentato nel Novembre 2004 al Workshop Aggregate Demand and Economic Growth Sydney, Faculty of Economics and Business, University of Sydney.
"Cycles and Growth: A Note on Development in a Market Economy" presentato nel Novembre 2004 al Workshop Aggregate Demand and Economic Growth Sydney, Faculty of Economics and Business, University of Sydney
GAREGNANI, Pierangelo;TREZZINI, ATTILIO
2004-01-01
Abstract
The paper moves in a theoretical context in which the level of economic activity is dependent on aggregate demand in the long as well as in the short run. The paper shows that given two simple hypotheses the economic system will tend to grow regardless of what happens to the average level of investment over time. The two simple hypotheses are a) that the marginal propensity to consume of the community is lower when the income contracts in the slumps than it is when income increases and b) that investment oscillates over time. These two assumptions are sufficient to identify a source of economic growth which is endogenous to the system.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
