ABSTRACT
In the Kaleckian literature, there is an important emphasis on the stagnationist tendencies of modern capitalist economies. This tendency originates in the failure of effective demand to ensure adequate levels of growth in the economy. Within this context, an important potential source of demand comes from technological progress, which was, therefore, seen by many economists as providing the possibility of higher sustainable levels of consumption. This latter aspect has important implications for the sustainability of long-run growth. The question addressed in this paper is whether technological progress can generate sufficiently high levels of effective demand to overcome the stagnationist tendencies of modern economies. To answer this question we use a Kaleckian model that considers the possible effects which technological change may have on aggregate demand via lower prices, more productive resources, etc.
