Vol. 43 No. 3 (2023)
Jul-Sep / 2023
Published August 11, 2023
How to Cite
Oreiro, José Luis, and Julio Fernando Costa Santos. 2023. “The Impossible Quartet in a Demand Led Growthsupermultiplier Model for a Small Open Economy”. Brazilian Journal of Political Economy 43 (3):592-618. https://doi.org/10.1590/0101-31572023-3448.
The impossible quartet in a demand led growthsupermultiplier model for a small open economy
Abstract
The aim of this paper is to investigate the long run sustainability of a growth
path led by multiple non-creating capacity autonomous expenditures in a demand led-supermultiplier
model for a small open economy. Using two different models the results show that
it is impossible to have in the same model long-term economic growth driven by the non-capacity
creating component of domestic demand, exogenous income distribution, long-run balance between productive capacity and aggregate demand and balance of payments equilibrium.
Economic viability of the balanced-growth path demands growth to be led by exports,
at least for small open economies.
JEL Classification: E12; E37; P10
Keywords: Post-Keynesian economics growth and distribution Sraffian supermutiplier simulation models