The Sraffian supermultiplier and cycles: Theory and empirics

Arbeitspapier

This paper provides a theoretical and empirical reassessment of supermultiplier theory. First, we show that, as a result of the passive role it assigns to investment, the Sraffian supermultiplier (SSM) predicts that the rate of utilization leads the investment share in a dampened cycle or, equivalently, that a convergent cyclical motion in the utilization-investment share plane would be counterclockwise. Second, impulse response functions from standard recursive vector autoregressions (VAR) for postwar US samples strongly indicate that the investment share leads the rate of utilization, or that these cycles are clockwise. These results raise questions about the key mechanism underlying supermultiplier theory.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 993

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity ; Aggregate Factor Income Distribution ; Business Fluctuations; Cycles
• Subject: Sraffian Supermultiplier ; Cyclical Growth ; (Induced) Investment ; Desired Rate of Capacity Utilization

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Nikiforos, Michalis ; Santetti, Marcio ; Von Arnim, Rudiger
• Event: Veröffentlichung
• (who): Levy Economics Institute of Bard College
• (where): Annandale-on-Hudson, NY
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/249781
• Last update: 10.03.2025, 11:42 AM CET