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The Economics Of Demand-Led Growth

Challenging the Supply-side Vision of the Long Run
Edited by Mark Setterfield, Professor of Economics, Trinity College, Hartford, US, Associate Member, Cambridge Centre for Economic and Public Policy, Cambridge University, UK and Senior Research Associate, International Economic Policy Institute, Laurentian University, Canada
The Economics of Demand-Led Growth is a collection of specially written essays that develop and apply the theory of demand-led growth.

Long-run growth is usually portrayed as a supply-determined process. The contributions to this volume, however, are rooted in the theory of demand-led growth. In addition to general discussions of the role of demand in the long-run, the volume contains essays in the Kaldorian and Kaleckian traditions, and a section on the relationship between demand-led growth and structural change. The conclusion reached is that current neglect of the role of demand in analyses of long-run growth is unwarranted.
Extent: 320 pp
Hardback Price: £93.00 Online: £83.70
Publication Date: 2002
ISBN: 978 1 84064 177 6
Availability: In Stock
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  • Economics and Finance
  • Post-Keynesian Economics
The Economics of Demand-Led Growth is a collection of specially written essays that develop and apply the theory of demand-led growth.

Long-run growth is usually portrayed as a supply-determined process. The contributions to this volume, however, are rooted in the theory of demand-led growth. In addition to general discussions of the role of demand in the long-run, the volume contains essays in the Kaldorian and Kaleckian traditions, and a section on the relationship between demand-led growth and structural change. The conclusion reached is that current neglect of the role of demand in analyses of long-run growth is unwarranted.

This book will prove indispensable to academic economists and graduate students in economics for its contributions to the field of macrodynamics and, in particular, its development of non-neoclassical approaches to macrodynamics.
‘Demand-led growth theories call our attention to the powerful effects of factors usually neglected by neoclassical growth economics, including income distribution, institutions, structural change, history, path dependency and demand management policy. . . Setterfield’s Demand-led Growth provides a useful introduction to this literature. It should be on the syllabus of graduate macroeconomics courses; most of the essays are suitable for advanced undergraduates as well.’
– Christopher J. Niggle, Review of Political Economy

‘As Keynes noted 65 years ago, the “great puzzle of effective demand” disappeared from economics for a century between Malthus and Keynes. It has recently been in danger of disappearing again. These lucid essays help assure that it will not. They ably summarize growth theory from the demand-side perspective, and in particular, they highlight for a new generation the continuing vital importance of Nicholas Kaldor's ideas.’
– James K. Galbraith, University of Texas, Austin, US
Contributors: G. Argyrous, H.S. Atesoglu, R.A. Blecker, M. Cassetti, J. Cornwall, J. Halevi, M. Lavoie, J.S.L. McCombie, T. Mott, E.J. Nell, T.I. Palley, P. Petit, M. Roberts, M. Setterfield, L. Soete, R. Taouil
Contents

1 Introduction: a dissenter’s view of the development of growth theory and the importance of demand-led growth
Mark Setterfield

PART ONE FUNDAMENTAL ISSUES IN THE THEORY OF DEMAND-LED GROWTH
2 Keynesian macroeconomics and the theory of economic growth: putting aggregate demand back in the picture
Thomas I. Palley

3 The exogeneity of investment: from systemic laws of accumulation and growth to effective demand conditions
Joseph Halevi and R?duane Taouil

4 Growth and fluctuations in the USA: a demand-oriented explanation
H. Sonmez Atesoglu

PART TWO KALDORIAN MODELS OF DEMAND-LED GROWTH
5 A neo-Kaldorian perspective on the rise and decline of the Golden Age
Mark Setterfield and John Cornwall

6 The role of the balance of payments in economic growth
J.S.L. McCombie and Mark Roberts

7 Pitfalls in the theory of growth: an application to the balanceof-payments-constrained growth model
Thomas I. Palley

PART THREE KALECKIAN MODELS OF DEMAND-LED GROWTH
8 Distribution, demand and growth in neo-Kaleckian macro-models
Robert A. Blecker

9 Longer-run aspects of Kaleckian macroeconomics
Tracy Mott

10 The Kaleckian growth model with target return pricing and conflict inflation
Marc Lavoie

11 Conflict, inflation, distribution and terms of trade in the Kaleckian model
Mario Cassetti

PART FOUR TRAVERSE ANALYSIS AND DEMAND-LED GROWTH
12 A model of Kaldorian traverse: cumulative causation, structural change and evolutionary hysteresis
Mark Setterfield

PART FIVE STRUCTURAL CHANGE AND DEMAND-LED GROWTH
13 Endogenous demand in the theory of transformational growth
George Argyrous

14 Notes on the transformational growth of demand
Edward J. Nell

15 Is a biased technological change fuelling dualism?
Pascal Petit and Luc Soete

Index