Artikel
The macroeconomic implications of zero growth: a post-Keynesian approach
This paper tries to clarify some important aspects of the zero-growth discussion, in particular the consistency of stable zero growth with positive profits and a positive real interest rate. Starting from an accounting perspective, the authors 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 the authors to show that a stationary economy, that is, an economy with zero net investment, is compatible with positive profits and interest rates. They also argue 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, they make use of an autonomous demand-led growth model driven by government expenditures. They show that a stable stationary state, with zero growth, positive profits and a positive interest rate, is possible in that model. However, the stable adjustment of government-expenditures–capital and government-debt–capital ratios to their long-run equilibrium values requires specific maxima for the propensity to consume out of wealth and for the rate of interest, assuming a balanced government budget and zero retained earnings of the firm sector.
- Language
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Englisch
- Bibliographic citation
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Journal: European Journal of Economics and Economic Policies: Intervention (EJEEP) ; ISSN: 2052-7772 ; Volume: 19 ; Year: 2022 ; Issue: 1 ; Pages: 41-60
- Classification
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Wirtschaft
Environment and Growth
Capitalist Systems: General
- Subject
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ecological macroeconomics
post-Keynesian economics
stationary-state economics
growth imperativeQ01
- Event
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Geistige Schöpfung
- (who)
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Hein, Eckhard
Jimenez, Valeria
- Event
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Veröffentlichung
- (who)
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Edward Elgar Publishing
- (where)
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Cheltenham
- (when)
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2022
- DOI
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doi:10.4337/ejeep.2022.01.05
- Handle
- Last update
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10.03.2025, 11:41 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
- Artikel
Associated
- Hein, Eckhard
- Jimenez, Valeria
- Edward Elgar Publishing
Time of origin
- 2022
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