To a discussion on the shifting mode of reproduction

Abstract

The present article is a response of the authors of the theory of the shifting mode of reproduction (SMR) to the critical article by E. Goryunov “Theory of the shifting modes of reproduction: Where do the non-neutrality of money and economic cycles come from?” (Voprosy Ekonomiki, 2023, No. 12). The main disagreement between us and Goryunov is as follows. We believe that money can be non-neutral in the long-run, and therefore the policy of monetary stimulation under certain conditions is able to activate economic growth in the long run. Goryunov adheres to the opposite point of view and tries to justify it. In our reply, we prove that Goryunov’s criticism is untenable because it is based on artificial techniques and false preconditions that have no relation to the PRV model. There is no doubt that the SMR model needs further improvement. However, we are by no means going to give up the obvious advantage of the model: its ability to consider economic growth as a process that depends significantly on the financing of investment in fixed capital. This kind of monetary stimulation of growth is inherent in the real economy, and the SMR model mimics it.