Supply and demand in Kaldor’s models of growth

Area 13 – Scienze economiche e statistiche

On abandoning, in the late 1960s, the full-employment assumption characterising all his previous contributions to the analysis of economic growth, Nicholas Kaldor proposes a conception of the growth process based on the crucial role of the demand for exports in driving and limiting output expansion, and on the recognition of the full elasticity of the supply of resources, given sufficient time, to production requirements.The essay explores into this passage in Kaldor’s thinking, emphasising not only the differences, but also the analytical elements of continuity between the two different phases of his analysis of growth. The main element of continuity is identified in Kaldor’s conception of investment behaviour and in its implication that domestic demand does not normally set endogenous limits to output expansion.Antonella Palumbo is a researcher of economics at the University of Roma Tre.

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