The idea that saving is the force driving private investment and economic growth has become ever more entrenched in mainstream economic thought as well as in the minds of policymakers and the general public. Even though the empirical evidence that increased household saving will directly...

Based on neoclassical theory, cutting budget deficits has come to be seen as a principal way to increase long-run growth, but the empirical evidence is ambiguous on the outcome of this macropolicy. A new model, the classical growth cycles (CGC) model, offers an alternative theoretical framework...

Modest sales expectations and limited access to bank credit may be curtailing small businesses' plans for hiring and capital investment.

This paper contrasts the different approaches to export-led growth used by Harrod and Thirlwall. It argues that, unlike Thirlwall's model, Harrod emphasized the importance of both demand- and supply-sides in his analysis of growth. The fundamental difference between the two authors lies in their...

The aim of this paper is to derive an endogenous growth and cycles model which integrates the sectoral incomes, expenditures, and finance requirements into an ex ante social accounting matrix (SAM) in the spirit of the Cambridge Economic Policy Group. The SAM includes households, businesses, a...

The ‘comprehensive socialization of investment’ was a key policy goal of The General Theory. And yet, empirically, we have seen a decline in the public investment share in most OECD countries since the economic crisis of the 1970s. In this paper we study several issues concerning...

The drive for labor market flexibility has become something of an intellectual and political crusade in the past several decades. As part of the conventional ‘best practice’ view of economic policy, labor market flexibility can be considered to be at the heart of what Thomas...

The aim of this paper is to derive an endogenous growth and cycles model that integrates sectoral incomes, expenditures, and finance requirements into an ex ante social accounting matrix (SAM) in the spirit of the Cambridge Economic Policy Group. The SAM includes households, businesses, a...

In this paper the impact of fiscal policy is analyzed within the context of an endogenous growth and cycles model. The investigation shows the different situations in which government expenditure can lead to both crowding-in and crowding-out of output and employment. With regard to the cycle, an...

This paper is an extension of an earlier working paper ("Finance and the Macroeconomic Process in a Classical Growth and Cycles Model," Levy Institute Working Paper No. 253). The basic structure of the model remains unchanged in that it is based on a social accounting matrix (SAM) with...