The question of the causality between supply and demand and “post-Keynesianism”

In traditional economic analysis, production is determined by demand in the short term and by supply in the long term. The supply of goods and services depends on demographics, technological progress and the investment effort, which in the long term depends on savings capacity. But for “post-Keynesians”, production is determined by demand even in the long term: strong demand leads companies to invest, modernise and hire people who were previously unemployed, leading in the long term to higher growth and, since the level of production is higher, a larger savings capacity to finance investment. We can try to test w hich of the traditional and post-Keynesian analys e s bears scrutiny (we look at the United States, the euro zone and Japan) by looking at the direction of the causality between demand, capital accumulation, technological progress (total factor productivity) and the participation rate. We find that: Demand causes capital accumulation but not total factor productivity in all countries; In the United States, it also causes the participation rate. It is therefore the United States that is closest to post-Keynesianism.