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The theory of output in the modern classical approach: main principles and controversial issues*

Attilio Trezzini and Antonella Palumbo

Keywords: demand-led growth; classical political economy; capacity utilization

An approach to the theory of output and growth which combines the classical theory of value and distribution with Keynes's principle of effective demand originates from the theoretical contribution of Piero Sraffa. The paper addresses the main lines of this ‘classical–Keynesian’ approach. It also expounds the main questions that animate the debate within the approach.

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