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Consistent with neoclassical theory, the recent slowdown in labour productivity is generally regarded as one of the main causes of the current phase of economic stagnation. By contrast, post-Keynesian economics looks at productivity growth as positively affected by the rate of growth of output in the long run as well. By focusing on this alternative perspective, in our exploration we deal with an extended version of the Kaldorian technical progress function in which the trend growth rate of productivity is endogenously shaped by the dynamics of both output and capital−labour ratio. We empirically verify such a relationship for the total economy and the manufacturing sector through a structural vector autoregressive (SVAR) model for G7 countries (1970–2017). Our findings support the validity of a technical progress function, which admits increasing returns to scale, thus indicating that both the rate of growth of output and the process of capital intensification exert positive effects on productivity growth, even beyond the business cycle. [ABSTRACT FROM AUTHOR]

The paper investigates the determinants of private investment and economic growth from a theoretical perspective. We start with a critical analysis of the crowding-out effect and we present a new version of the Sraffian Supermultiplier: a model that accounts for both the multiplier and accelerator effects. We focus on different types of fiscal policies: generic ones and 'mission-oriented' ones that set a new direction for the economy. We show that mission-oriented policies have the potential to generate the largest positive effect on investments and output growth as well as on innovation processes and labour productivity growth. [ABSTRACT FROM AUTHOR]