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Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?

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  • Avi J. Cohen
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    Abstract

    We argue that the Cambridge capital theory controversies of the 1950s to 1970s were the latest in a series of still-unresolved controversies over three deep issues: explaining and justifying the return to capital; Joan Robinson's complaint that, due to path dependence, equilibrium is not an outcome of an economic process and therefore an inadequate tool for analyzing accumulation and growth; and the role of ideology and vision in fuelling controversy when results of simple models are not robust. We predict these important and relevant issues, latent in endogenous growth and real business cycle theories, will erupt in future controversy.

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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/089533003321165010
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    Bibliographic Info

    Article provided by American Economic Association in its journal Journal of Economic Perspectives.

    Volume (Year): 17 (2003)
    Issue (Month): 1 (Winter)
    Pages: 199-214

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    Handle: RePEc:aea:jecper:v:17:y:2003:i:1:p:199-214

    Note: DOI: 10.1257/089533003321165010
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    1. Swan, Trevor W, 2002. "Economic Growth," The Economic Record, The Economic Society of Australia, vol. 78(243), pages 375-80, December.
    2. Robert M. Solow, 2000. "The neoclassical theory of growth and distribution," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 349-381.
    3. Garegnani, P, 1970. "Heterogeneous Capital, the Production Function and the Theory of Distribution: Reply," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 439, July.
    4. Fisher, Franklin M, 1971. "Aggregate Production Functions and the Explanation of Wages: A Simulation Experiment," The Review of Economics and Statistics, MIT Press, vol. 53(4), pages 305-25, November.
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    7. Solow, Robert M, 1970. "On the Rate of Return: Reply to Pasinetti," Economic Journal, Royal Economic Society, vol. 80(318), pages 423-28, June.
    8. Garegnani, P, 1970. "Heterogeneous Capital, the Production Function and the Theory of Distribution," Review of Economic Studies, Wiley Blackwell, vol. 37(3), pages 407-36, July.
    9. Harcourt, G C, 1976. "The Cambridge Controversies: Old Ways and New Horizons-Or Dead End?," Oxford Economic Papers, Oxford University Press, vol. 28(1), pages 25-65, March.
    10. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    11. Robinson, Joan, 1975. "The Unimportance of Reswitching," The Quarterly Journal of Economics, MIT Press, vol. 89(1), pages 32-39, February.
    12. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
    13. Robinson, Joan, 1975. "Reswitching: Reply," The Quarterly Journal of Economics, MIT Press, vol. 89(1), pages 53-55, February.
    14. Pasinetti, Luigi L, 1970. "Again on Capital Theory and Solow's 'Rate of Return'," Economic Journal, Royal Economic Society, vol. 80(318), pages 428-31, June.
    15. Luigi L. Pasinetti, 2000. "Critique of the neoclassical theory of growth and distribution," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 53(215), pages 383-431.
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    Cited by:
    1. Steven Toms, 2010. "Value, profit and risk: accounting and the resource-based view of the firm," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 23(5), pages 647-670, June.
    2. van Suntum, Ulrich, 2008. "Dynamic efficiency and reswitching," CAWM Discussion Papers 8, Center of Applied Economic Research Münster (CAWM), University of Münster.
    3. Hallegatte, Stephane, 2014. "Economic resilience: definition and measurement," Policy Research Working Paper Series 6852, The World Bank.
    4. Jonathan Temple, 2010. "Aggregate production functions, growth economics, and the part-time tyranny of the identity: a reply to Felipe and McCombie," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(6), pages 685-692.
    5. Harper, David A. & Endres, Anthony M., 2010. "Capital as a layer cake: A systems approach to capital and its multi-level structure," Journal of Economic Behavior & Organization, Elsevier, vol. 74(1-2), pages 30-41, May.
    6. Thomas Fredholm & Stefano Zambelli, 2013. "Production Functions Behaving Badly - Reconsidering Fisher and Shaikh," ASSRU Discussion Papers 1305, ASSRU - Algorithmic Social Science Research Unit.
    7. S K Mishra, 2010. "A Brief History of Production Functions," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(4), pages 6-34, November.
    8. Gracia, Eduard, 2011. "Uncertainty and capacity constraints: Reconsidering the aggregate production function," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 5(19), pages 1-50.
    9. Anthony M. Endres & David A. Harper, 2012. "The kinetics of capital formation and economic organisation," Cambridge Journal of Economics, Oxford University Press, vol. 36(4), pages 963-980.
    10. George Bitros, 2010. "The theorem of proportionality in contemporary capital theory: An assessment of its conceptual foundations," The Review of Austrian Economics, Springer, vol. 23(4), pages 367-401, December.
    11. Schefold, Bertram, 2008. "C.E.S. production functions in the light of the Cambridge critique," Journal of Macroeconomics, Elsevier, vol. 30(2), pages 783-797, June.
    12. Felipe, Jesus & Laviña, Editha & Fan, Emma Xiaoqin, 2008. "The Diverging Patterns of Profitability, Investment and Growth of China and India During 1980-2003," World Development, Elsevier, vol. 36(5), pages 741-774, May.
    13. Cavalieri, Duccio, 2013. "A theory of capital as value in progress," MPRA Paper 47197, University Library of Munich, Germany.
    14. Cavalieri, Duccio, 2013. "A Critical Marxist Approach to Capital Theory," MPRA Paper 50527, University Library of Munich, Germany.
    15. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "Energy distribution and economic growth," Resource and Energy Economics, Elsevier, vol. 33(4), pages 782-797.
    16. Asheim, Geir B., 2008. "Paradoxical consumption behavior when economic activity has environmental effects," Journal of Economic Behavior & Organization, Elsevier, vol. 65(3-4), pages 529-546, March.
    17. Giuseppe Fontana & Bill Gerrard, 2006. "The future of Post Keynesian economics," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 59(236), pages 49-80.
    18. Guillaume Daudin, 2006. "Paying transaction costs," Sciences Po publications n°2006-14, Sciences Po.
    19. repec:spo:wpecon:info:hdl:2441/942 is not listed on IDEAS
    20. Mark Hayes, 2006. "The Economics of Keynes: A New Guide to The General Theory," Books, Post Keynesian Economics Study Group (PKSG), number nggt, December.
    21. Martin de Wit & Matthew Kuperus Heun & Douglas J Crookes, 2013. "An overview of salient factors, relationships and values to support integrated energy-economic systems dynamic modelling," Working Papers 02/2013, Stellenbosch University, Department of Economics.
    22. Romeo Ionescu, 2012. "Technical Progress as a Solution for Romania and Greece to Face the Global Crisis’ Problems and the Bad Forecasts," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 33-46.

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