Munich Personal RePEc Archive

Wachstum durch das Nadelöhr begrenzter Budgets

Klein, Rolf (2011): Wachstum durch das Nadelöhr begrenzter Budgets. Published in: WISO Diskurs No. November 2011 (November 2011)

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The interplay between supply and demand in the context of growth processes is examined. It is demonstrated that economic development is also significantly influenced by demand under classic, exchange-based hypotheses. Growth assumes that economic operators are willing to change the composition of their budgets. Any additional product must pass through the confines of an existing budget. Growth is not possible without a change in the preferences of solvent buyers. Factors like inventions, changes in society, new fashions or amended regulations can facilitate the integration of additional products. The willingness or resistance to change of potential buyers is thus a possible element in explaining the development of economies that do not fully utilize their production potential. Changes in the structure of demand can cause an economy to grow or shrink. Increases in demand funded by broadly spread savings that are ultimately recompensed – i.e. in form of a new matching of exchange relationships – create growth. Conversely, savings concentrated on certain products that lead to money saved being spent diffusely result in negative growth. In order to assess whether changes in state or state-influenced demand, technical innovations, shifts in society or wage adjustments are conducive to growth, the question has to be asked whether the integration of additional products into the budget is ultimately being encouraged. Government decisions, whether as a fiscal body or setter of standards, can influence the structure of demand and hence economic developments, strategically or unintentionally.

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