Three Essays on Aggregate Demand and Growth

Macroeconomic theory has mainly focused on supply-
side issues since the early 1970s. In general,
theory has not left much room for aggregate demand
to influence the system, except for causing
temporary departures from a given long-run
equilibrium path. Policy recommendations, in turn,
reflect such perspective and generally point to
supply-side aspects as the main focus for
policymakers. However, the inclusion of aggregate
demand in the analysis may provide useful insights
to understand the performance of the economy in the
long run, admitting that technological change,
productivity and the supply of labor respond to
aggregate demand growth. This book consists of three
independent essays that explore different aspects of
the relation between aggregate demand and growth. In
all the papers, theoretical effort is followed by
rigorous empirical analysis focusing on Latin
America, providing evidence on the arguments put
forward in the text. The analysis and results
provided here illustrate different aspects of demand-
led growth, and supports the idea that
recessions may have long-lasting and irreversible
effects on output and employment.

Autorentext

Gilberto Libanio holds a PhD in Economics from the University of Notre Dame (USA) and is a professor of economics at the Federal University of Minas Gerais, Brazil. His main areas of interest are macroeconomics, central banking, growth theory and international finance, with a regional focus on Latin America.

Klappentext

Macroeconomic theory has mainly focused on supply-side issues since the early 1970s. In general, theory has not left much room for aggregate demand to influence the system, except for causing temporary departures from a given long-run equilibrium path. Policy recommendations, in turn, reflect such perspective and generally point to supply-side aspects as the main focus for policymakers. However, the inclusion of aggregate demand in the analysis may provide useful insights to understand the performance of the economy in the long run, admitting that technological change, productivity and the supply of labor respond to aggregate demand growth. This book consists of three independent essays that explore different aspects of the relation between aggregate demand and growth. In all the papers, theoretical effort is followed by rigorous empirical analysis focusing on Latin America, providing evidence on the arguments put forward in the text. The analysis and results provided here illustrate different aspects of demand-led growth, and supports the idea that recessions may have long-lasting and irreversible effects on output and employment.