A supermultiplier model of the natural rate of growth
Résumé
We propose a supermultiplier model that includes formal and informal wage redistributive devices enabling everyone in the population to satisfy their primary needs. By introducing population growth and technical progress into the model, we show that wage redistribution gives rise to an autonomous consumption component, the growth rate of which corresponds to the natural rate of growth. The three main outcomes of the model are as follows: (a) Harrodian knife-edge instability can be tamed, (b) the long-run rate of growth of the economy converges toward the natural rate of growth, and (c) the rate of employment stabilizes but at a level that can differ from that of full employment.