The Reception of Thomas Robert Malthus in Europe, America and Japan
Edited by Gilbert Faccarello, Masashi Izumo and Hiromi Morishita
Developments, Policies and Enforcement Trends in the US and Korea
Edited by Jay P. Choi, Wonhyuk Lim and Sang-Hyop Lee
A Brief Alternative History
This paper derives firms’ desired rate of utilization from an explicit maximization of a conjectured rate of profit at the micro level. Invoking a strategic complementarity, desired utilization is thus an increasing function of not only the profit share but also the actual utilization. Drawing on recent empirical material and a straightforward functional specification, the model is subsequently numerically calibrated. In particular, this ensures a unique solution for a steady-state position in which the actual and the endogenous desired rates of utilization coincide. On the other hand, it turns out that the anticipated losses of firms by not producing at the desired level are rather small. Hence there may be only weak pressure on them to close a utilization gap in the ordinary way by suitable adjustments in fixed investment. It is indicated that this finding may serve Kaleckian economists as a more rigorous justification for viewing their equilibria as pertaining to the long run, even if they allow actual utilization to deviate persistently from desired utilization.
José A. Pérez-Montiel and Carles Manera Erbina
This paper tests the main postulates of the Sraffian supermultiplier model for the case of 16 European economies during the period 1995–2018. We adopt the methodology of Girardi and Pariboni (2016) and extend it to a panel framework. We apply panel unit root, cointegration, and causality tests that are robust to endogenous regressors, cross-sectional dependence and heterogeneity across countries. Our results are supportive of the Sraffian supermultiplier model. In a heterogeneous panel framework, autonomous demand and output follow a long-run equilibrium relationship and there exists panel long-run causality that goes unidirectionally from autonomous demand to output. We also empirically verify the investment accelerator (the mechanism that enables the dynamic stability of the model) by confirming the existence of same-sign panel causality running unidirectionally from the growth rate of autonomous demand to the investment share. Our results call for national economic policies aimed at promoting the components of autonomous demand that act as locomotives of growth in each country.