Demand-led Growth, Exogenous Distribution and Structural Heterogeneity: Revisiting Alfredo Monza's Contribution to a Classical-Keynesian-Structuralist Approach

Abstract

The extension of the principle of effective demand to accumulation theory traces back to Harrod’s seminal 1939 article. Since then, numerous contributions have further developed demand-led growth models, offering an alternative explanation of accumulation processes compared to conventional supply-led approaches. While leading figures of Latin American Structuralism have incorporated elements from the classical theory of value and distribution, few have extended the role of effective demand beyond explaining cyclical fluctuations. Alfredo Monza’s 1976 work, Crecimiento y Demanda, marks a decisive departure from this pattern. Using a three-sector, small open economy framework, Monza builds a Classical-Keynesian Structuralist synthesis that integrates wage- and profit-led consumption, exports, and investment based on accelerator expectations. Notably, he treats productive capacity as endogenous to demand and shows that, under a stable normal degree of capacity utilization, autonomous demand alone can drive long-run growth. This anticipates key insights of the Sraffian supermultiplier approach developed nearly two decades later. This article revisits debates on demand-led growth models and the theoretical contributions of major structuralist authors. It concludes with a reassessment of Monza’s 1976 model, evaluating its analytical structure in light of the modern supermultiplier and highlighting its significance for alternative growth theories in peripheral economies.