ABSTRACT
A Dynamic Aggregate Demand and Supply (DADS) model of real economic growth is assembled from well-known Keynesian consumption, investment, monetary and government components together with a production function and equation of capital accumulation. Conditions for which model solutions grow and converge to or fluctuate about a steady state are derived. Further conditions — including a pay-as-you-go fiscal policy — imply convergence to a Solow model and hence to a competitive equilibrium. This, in turn, implies the existence of a supporting aggregate social utility function. The DADS model thus constitutes a framework that encompasses and effectively unifies the major, independently formulated macroeconomic theories of Keynes, Solow and the optimal growth school of Ramsey, Cass, Koopmans, Barro, Kydland, Prescott, Stokey, Lucas, Cooley-Prescott, et al.
