Autonomous demand and the warranted rate of growth

Unless equality is exogenously imposed between the rate of growth of autonomous demand and the warranted rate, a given rate of growth of autonomous demand generates various ‘short-period’ warranted rates of growth, period by period. In a stable case, these ‘short-period’ warranted rates converge to a unique ‘long-period’ warranted rate, this being determined independently of the rate of growth of autonomous demand. Thus one has a non-steady path of normal output growth. Different rates of growth of autonomous demand engender, for one and the same configuration of normal income distribution, different paths of normal output growth. Moreover, in a circulating-capital-only model with a given constant rate of growth of autonomous demand, different initial rates of growth in aggregate demand also produce different paths of normal output growth. These results point to the importance of effective demand in capital accumulation.