Economics Department Working Paper Series

Working Paper Number

2020-12

Journal or Book Title

UMass Economics Working Papers

Publication Date

2020

Abstract

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.

License

UMass Amherst Open Access Policy

Included in

Economics Commons

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