Supply and Demand in Kaldorian Growth Models: A Proposal for Dynamic Adjustment

This paper analyses the dynamic adjustment of supply and demand in Kaldorian growth models. We aim at discussing how rate a country, given by constraints, adjust towards supply-side, vice-versa, presenting necessary conditions for those adjustments. Our main conclusion is that if there are no capital firms invest to maintain constant desired level utilization. Depending on specific conditions, however, an economy may face labour which would require mechanism employment. The Palley-Setterfield approach brings possible reconciliation supply- demand- long-term rates. However, we must raise some considerations about market order understand characteristics this approach. draw from critique McCombie, employment adjusts immediately guarantee equilibrium between demand. propose McCombie approaches, model focused adjustment, both types adjustments represent extreme cases, existence intermediate cases.