Arbeitspapier
The macroeconomic implications of zero growth: A post-Keynesian approach
This paper tries to clarify some important aspects around the zero-growth discussion. Starting from an accounting perspective, we analyse the implications of zero growth and clarify the stability conditions of such an economy. This is complemented with a monetary circuit approach - which, like any model, has to respect the national income and financial accounting conventions. The latter allows us to show that a stationary economy, i.e an economy with zero net investment, is compatible with positive profits and interest rates. It is also argued that a stationary economy does not generate systemic financial instability, in the sense of rising or falling financial assets- or financial liabilities-income ratios, if the financial balances of each macroeconomic sector are zero. In order to analyse the dynamic stability of such an economy, we make use of an autonomous demand-led growth model driven by government expenditures. We show that a stable stationary state with zero growth, positive profits, and a positive interest rate is possible. However, the stable adjustment of government expenditure-capital and government debt-capital ratios to their long-run equilibrium values requires specific maxima for the propensity to consume out wealth and for the rate of interest, assuming a balanced government budget and zero retained earnings of the firm sector.
- Language
-
Englisch
- Bibliographic citation
-
Series: Working Paper ; No. 169/2021
- Classification
-
Wirtschaft
Sustainable Development
Environment and Growth
Capitalist Systems: General
- Subject
-
Ecological macroeconomics
post-Keynesian economics
stationary-state economics
growth imperative
- Event
-
Geistige Schöpfung
- (who)
-
Hein, Eckhard
Jimenez, Valeria
- Event
-
Veröffentlichung
- (who)
-
Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE)
- (where)
-
Berlin
- (when)
-
2021
- Handle
- Last update
-
10.03.2025, 11:45 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hein, Eckhard
- Jimenez, Valeria
- Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE)
Time of origin
- 2021
Other Objects (12)
The macroeconomic implications of zero growth: a post-Keynesian approach
Varieties of demand and growth regimes: Post-Keynesian foundations
Varieties of demand and growth regimes – post-Keynesian foundations
Post-Keynesian macroeconomics since the mid 1990s: main developments
Post-Keynesian macroeconomics since the mid-1990s: Main developments
Post-Keynesian macroeconomics since the mid-1990s – main developments
The rate of interest as a macroeconomic distribution parameter: Horizontalism and Post-Keynesian models of distribution of growth
A Post-Keynesian macroeconomic policy mix as an alternative to the New Consensus approach
Financialisation, distribution & the macroeconomic regimes before & after the crisis: A post-Keynesian view on Denmark, Estonia & Latvia
Inflation is always and everywhere … a conflict phenomenon: Post-Keynesian inflation theory and energy price driven conflict inflation
Saving and Investment in the Twenty-First Century: The Great Divergence – some comments from a post-Keynesian perspective
Karl Marx: An early post-Keynesian? A comparison of Marx's economics with the contributions by Sraffa, Keynes, Kalecki and Minsky
The macroeconomic implications of zero growth: a post-Keynesian approach
Varieties of demand and growth regimes: Post-Keynesian foundations
Varieties of demand and growth regimes – post-Keynesian foundations
Post-Keynesian macroeconomics since the mid 1990s: main developments
Post-Keynesian macroeconomics since the mid-1990s: Main developments
Post-Keynesian macroeconomics since the mid-1990s – main developments
The rate of interest as a macroeconomic distribution parameter: Horizontalism and Post-Keynesian models of distribution of growth
A Post-Keynesian macroeconomic policy mix as an alternative to the New Consensus approach
Financialisation, distribution & the macroeconomic regimes before & after the crisis: A post-Keynesian view on Denmark, Estonia & Latvia
Inflation is always and everywhere … a conflict phenomenon: Post-Keynesian inflation theory and energy price driven conflict inflation
Saving and Investment in the Twenty-First Century: The Great Divergence – some comments from a post-Keynesian perspective
Karl Marx: An early post-Keynesian? A comparison of Marx's economics with the contributions by Sraffa, Keynes, Kalecki and Minsky
The macroeconomic implications of zero growth: a post-Keynesian approach
Varieties of demand and growth regimes: Post-Keynesian foundations
Varieties of demand and growth regimes – post-Keynesian foundations
Post-Keynesian macroeconomics since the mid 1990s: main developments
Post-Keynesian macroeconomics since the mid-1990s: Main developments
Post-Keynesian macroeconomics since the mid-1990s – main developments
The rate of interest as a macroeconomic distribution parameter: Horizontalism and Post-Keynesian models of distribution of growth
A Post-Keynesian macroeconomic policy mix as an alternative to the New Consensus approach
Financialisation, distribution & the macroeconomic regimes before & after the crisis: A post-Keynesian view on Denmark, Estonia & Latvia
Inflation is always and everywhere … a conflict phenomenon: Post-Keynesian inflation theory and energy price driven conflict inflation
Saving and Investment in the Twenty-First Century: The Great Divergence – some comments from a post-Keynesian perspective