Trezzini (2015) presents a methodological approach for the study of the saving ratio that does not rely on normal capacity utilization positions. To explain the saving ratio he focuses instead on the fluctuations of consumption and investment. Precisely that focus requires I would argue a different kind of approach. Once the traditional theory of saving is discarded, the ‘indeterminacy’ of the saving ratio opens the way to an analysis of the evolution of consumption, and of how that evolution affects aggregate demand. The generation and evolution of autonomous demand are matters of obvious relevance to the classical-Keynesian approach to the analysis of growth. In this comment I take Duesenberry’s criticism of demand theory as the first step for focusing on the evolving standard of consumption and autonomous (‘innovative’) investment, therefore addressing directly the investment-consumption relationship. It seems to me that in a framework centered on the pace of accumulation this is a more fruitful line of investigation. There are of course a number of complicated questions involved and they are far from being satisfactorily analyzed. They are part of the necessary task of articulating a theory of consumption consistent with demand-led growth and forward-looking investment decisions.

Growth, Normal Capacity Utilization and the Long-Run Saving Ratio: A Comment

GUALERZI, DAVIDE
2017

Abstract

Trezzini (2015) presents a methodological approach for the study of the saving ratio that does not rely on normal capacity utilization positions. To explain the saving ratio he focuses instead on the fluctuations of consumption and investment. Precisely that focus requires I would argue a different kind of approach. Once the traditional theory of saving is discarded, the ‘indeterminacy’ of the saving ratio opens the way to an analysis of the evolution of consumption, and of how that evolution affects aggregate demand. The generation and evolution of autonomous demand are matters of obvious relevance to the classical-Keynesian approach to the analysis of growth. In this comment I take Duesenberry’s criticism of demand theory as the first step for focusing on the evolving standard of consumption and autonomous (‘innovative’) investment, therefore addressing directly the investment-consumption relationship. It seems to me that in a framework centered on the pace of accumulation this is a more fruitful line of investigation. There are of course a number of complicated questions involved and they are far from being satisfactorily analyzed. They are part of the necessary task of articulating a theory of consumption consistent with demand-led growth and forward-looking investment decisions.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11577/3227297
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