Scientific article

The Sraffian Supermultiplier and Cycles: Theory and Empirics

Published inReview of political economy, p. 1-20pp.
Publication date2023-01-24
First online date2023-01-24

This paper provides a theoretical and empirical reassessment of supermultiplier theory. First, we

show that, as a result of the passive role it assigns to investment, the Sraffian supermultiplier

(SSM) predicts that the rate of utilization leads the investment share in a dampened cycle or,

equivalently, that a convergent cyclical motion in the utilization-investment share plane would be

counterclockwise. Second, impulse response functions from standard recursive vector

autoregressions (VAR) for postwar US samples strongly indicate that the investment share leads

the rate of utilization, or that these cycles are clockwise. These results raise questions about the

key mechanism underlying supermultiplier theory.

  • Sraffian Supermultiplier
  • Cyclical Growth
  • (Induced) Investment
  • Desired Rate of Capacity Utilization.
Citation (ISO format)
NIKIFOROS, Michalis, SANTETTI, Marcio, VON ARNIM, Rudiger. The Sraffian Supermultiplier and Cycles: Theory and Empirics. In: Review of political economy, 2023, p. 1–20pp. doi: 10.1080/09538259.2022.2156722
Main files (1)
Article (Published version)
ISSN of the journal0953-8259

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