THE SRAFFIAN SUPERMULTIPLIER, HARROD’S FUNDAMENTAL INSTABILITY AND THE “OXBRIDGE” DILEMMA

Abstract

The paper compares and contrasts the sraffian supermultiplier demand led
growth model with key post-keynesian models, using a very simple analytical framework.
We demonstrate that: the supermultiplier model allows capacity to adjust to demand,
in sharp contrast with the Harrodian model; that in the Cambridge models we
have the opposite tendency of aggregate demand to adjust to capacity; and that the
supermultiplier preserves the exogeneity of the distribution parameter without the need
to assume that the actual degree of capacity utilization is endogenous in the longer run,
typical of models based in Kalecki and Steindl´s ideas.