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The study presents a simple extension of a Harrodian model, that explores, the relationship between the environment and economic growth in a hypothetical dual low-income economy with relatively low levels of environmental quality. It is supposed that the rise in effective demand increases the flow of negative externalities on the environment, which, in turn, would affect output expansion negatively in the capitalist sector through the occurrence of environmental adjustment costs. From such conflictual dynamics, the model shows that perpetual vicious circles may characterize the pattern of fluctuations in economic activity in this economy.

The article argues that the economic imbalances that caused the present crisis should be thought of as the outcome of the interaction of the effects of financial deregulation with the macroeconomic effects of rising inequality. In this sense rising inequality should be regarded as a root cause of the present crisis. I identify four channels by which it has contributed to the crisis. First, rising inequality creates a downwards pressure on aggregate demand since poorer income groups have high marginal propensities to consume. Second, international financial deregulation has allowed countries to run larger current account deficits and for longer time periods. Thus, in reaction to potentially stagnant demand, two growth models have emerged: a debt-led model and an export-led model. Third, (in the debt-led growth models) higher inequality has led to higher household debt as working-class families have tried to keep up with social consumption norms despite stagnating or falling real wages. Fourth, rising inequality has increased the propensity to speculate as richer households tend to hold riskier financial assets than other groups. The rise of hedge funds and of subprime derivatives in particular has been linked to rise of the super-rich.

En los artículos Initial and final finance in the monetary circuit and the effective demand theory (2016), y Endogenous money and the theory of long period effective demand (2020), este último escrito con Stefano di Buccianico, el economista Sergio Cesaratto propone un marco interpretativo para integrar algunos de los elementos de la teoría de la demanda agregada y la teoría monetaria heterodoxa en un solo cuerpo teórico coherente. El objetivo de este texto es presentar de la forma más clara y esquemática posible la propuesta teórica de Sergio Cesaratto, teniendo en cuenta la escaza difusión de las teorías pos-keynesianas en español, y la importancia teórica y analítica para la comprensión del funcionamiento del actual sistema económico capitalista.

In place of the standard search equilibrium, this paper presents an alternative concept of stochastic macro-equilibrium based on the principle of statistical physics. This concept of equilibrium is motivated by unspecifiable differences of economic agents and the presence of all kinds of micro shocks facing them. Our model mimics the empirically observed distribution of labor productivity. The distribution of productivity resulting from the matching of workers and firms depends crucially on aggregate demand. When aggregate demand rises, not only the unemployment rate declines, but more workers are employed by firms with higher productivity. The effect of the reservation wage on unemployment also depends on aggregate demand so that the distinction between cyclical and structural unemployment is ambiguous. The model, a general equilibrium model of monopolistic competition with friction and uncertainty provides a micro-foundation for Keynes’ principle of effective demand.

Keynes’s ‘conjecture’ that there are general equilibria of involuntary unemployment that are resistant to falling wages has now been demonstrated, albeit at the cost of making relatively restrictive assumptions about how markets or anticipation functions operate. This article aims to show that a general equilibrium model can be constructed based on assumptions widely accepted by economists, such as rejecting the Keynesian ‘second classical postulate’ and differentiating between households of employees and shareholders. In this model, involuntary unemployment is independent of wages. In this model, unemployment is explained solely by the determinants of effective demand: households’ marginal propensities to consume, the incentive to invest, and the interest rate. This marginal modification of the general equilibrium model calls into question the first welfare theorem, specifically the Pareto optimality of general equilibrium.

Mark Hayes's contribution (Hayes, 2007) is to be welcomed as it reaffirms that the economics of Keynes, which is sometimes denounced as being restricted to the demand side, has a solid supply-side basis in Keynes's Aggregate Supply Function, Z. Of course, Hayes is not the first scholar to stress this. Hayes reminds readers that Keynes, in the General Theory (1973, pp. 38240), expresses his unease with the concepts of aggregate levels of prices and output. Yet to claim that Keynes was adamant that these concepts were inadmissable, as Hayes does (2007, p. 1), would, in the authors' view, mean to throw out the baby with the bathwater.

The main objective of this article was to describe two asymmetric perspectives of the aggregate imbalance approach. Starting from the contrast of the Rational Expectations and Keynesian approaches, we analyze the characterization that the general reserve makes of the causes of inflation and the implications that it has on economic policy decisions. From the rational expectations approach, companies and workers form a kind of coherent group that jointly experiences fluctuations in the prices of their products and faces in unison the problem of signal extraction. On the other hand, the Keynesian approach to effective demand explains price fluctuations in principle as an expression of insufficient demand that generates involuntary unemployment. It was identified that the increase in margins during 2021 sought to pass on to consumers and end users of the goods and services of oligopolistic structures the increase in marginal costs induced by the fall in effective demand; resulting in an effect of price increases on the supply side or cost inflation.

The paper provides a simple theoretical framework to assess the macroeconomic implications of debt-fuelled consumption. In particular, the analysis is conducted through an extended super-multiplier model with endogenous credit money, which highlights the role of the autonomous components of demand, and in particular autonomous consumption, as the main drivers of economic growth. The author sketches a comparison with alternative heterodox formulations. He argues that, unlike the neo-Kaleckian models, in the model proposed here output growth adjusts to the path of debt-financed consumption. Having treated investment as fully induced, it follows that also the rate of capital accumulation adjusts to the rate of growth, which is itself determined by the evolution of autonomous demand. Finally, it is shown that the stability of the ratio of debt to debtors’ income is affected, among other things, by the growth differential between workers’ autonomous consumption (and debt) and the other autonomous components of demand, i.e. public expenditure and capitalists’ autonomous consumption. JEL Classification: E11, E12, E44, G01

This paper tries to highlight some essential elements that emerge from Luigi Pasinetti's work. Much of the research project that Pasinetti developed, especially in the 1981 book, was already present in nuce in the 1974 collection of essays. Here the theory of effective demand is presented for the first time, emphasizing the essential differences between sequential and simultaneous economic reasoning. The relevance of structural change is already apparent, and will be explored in a multisectoral scheme only in the 1981 book. The main insights that can be drawn from Pasinetti's reflections on open economic systems and his ethical stance suggest that ownership of the means of production not only confers rights but it also imposes responsibilities on the community.

This paper focuses on the dynamics analysis from the ultra-short to the short period from a Post-Keynesian perspective. It is argued that the construction of both the short-run and the long-run models are based on the critical assumption of an equilibrium between aggregate demand and aggregate supply. Starting from the work by Metzler (1941. The nature and stability of inventory cycles, The Review of Economic Statistics, 113–29), the issue of equilibrium and stability is investigated inside a Keynesian–Kaleckian perspective. The suggested model analyses under which conditions the standard Kaleckian conclusions are still valid considering a disequilibrium situation. Two scenarios are simulated: one with fixed expectations as in Metzler (1941. The nature and stability of inventory cycles, The Review of Economic Statistics, 113–29) and another based on adaptive expectations and asymmetric behaviour of the wages–unemployment relation. The model questions the effective demand labour curve and suggests that an increase in real autonomous expenditures, mainly by the government, might be even more essential than what is generally considered in the Kaleckian literature, to avoid increasing unemployment a world with increasing wages.