Working Paper Number
Sraffian supermultiplier models (SSM) try to identify autonomous components of demand. The most plausible candidate is government consumption. Descriptively, however, government consumption does not grow at a constant rate, and prescriptively there is no justification for keeping constant the growth rate of government consumption, irrespective of economic performance. An active fiscal policy guided by principles of functional finance can produce more powerful stabilization, avoid overheating and excessive utilization rates, and secure faster adjustments of the growth rate towards its target level.
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Skott, Peter; Costa Santos, Júlio Fernando; and da Costa Oreiro, José Luís, "Fiscal Policy, the Sraffian Supermultiplier and Functional Finance" (2020). UMass Economics Working Papers. 295.
Retrieved from https://scholarworks.umass.edu/econ_workingpaper/295