Working Paper - When is the Long Run? Historical Time and Adjustment Periods in Demand-led Growth Models
New Working Paper - When is the Long Run? Historical Time and Adjustment Periods in Demand-led Growth Models
My paper “When is the Long Run? Historical Time and Adjustment Periods in Demand-led Growth Models” just came out in the Economics Department Working Paper series of the The New School for Social Research
You can find it on RePEc: here
Here is the abstract:
In recent years, Post-Keynesian models of growth and distribution have substantially shifted their focus from short to long-run analysis. While many authors have focused on the convergence of demand-led growth models to a fully-adjusted equilibrium, relatively little attention has been given to the time required to reach this long-run position. In order to fill the gap, this paper seeks to answer the question of when is the long run in demand-led growth models. By making use of numerical integration, it analyses the time of adjustment from one steady-state to the other in two well-known demand-led growth models: the Sraffian Supermultiplier and the fully-adjusted version of the neo-Kaleckian model. The results show that the adjustment period is generally beyond an economically meaningful time span, suggesting that researchers and policy makers ought to pay more attention to the models’ predictions during the traverse rather than focusing on steady-state positions.
Further discussion and the replication code for the online Appendix can be found here
