Digital Historical Documents by William Wilson

By William Wilson

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By ‘inter-temporal budget constraints’ we intend only the condition that, over the medium to long term, agents (including governments) restrict their debt–income ratios within some definite finite magnitudes, regarded by them as sustainable. 9. Except, of course, the dominant production methods cannot be conceived of as being employed by no firms. But they need not necessarily be supposed as employed by even a majority of firms, if firms are of uneven size. For example a small number of firms that are large relative to the market as a whole can, in the relevant sense (with respect to production method), ‘dominate’ a larger number of small firms, though this might involve for the large firms a rate of return on capital above the competitive rate.

Continuous, uninterrupted growth would then depend upon particular sectors’ role as the growth driver being replaced by some other sectors, as the former reduce their autonomous demand growth, say, in order to repair balance sheets. After all, in a real sense what happened in the run-up to the Great Financial Crisis and subsequently was that the household sector (particularly the US household sector) withdrew as a driver of growth, to be replaced, at least partly and for a time, by the public sectors of some economies (see Barba and Pivetti, 2009).

560–6; Kurz and Salvadori, 2003, pp. 13–24, abbreviated in Kurz and Salvadori, 2002, pp. 226–32). Suffice it to make here the following observations. If input–output ratios are variable with respect to scale of production, then the second parameter cannot be known without the first. The use of scarce natural resources as production inputs is the most obvious factor pertinent here, as well as scale economies. It might be tempting to seek some kind of supply-function-like constructions in response to these possible relations between scale and input–output ratios.

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