Post-Keynesian Models of Economic Growth: Open Systems
AbstractThe closed systems nature of neoclassical models of economic growth - guaranteeing automatic equality between planned savings and investment which, in turn, ensures stability of such models - is achieved by assuming away the existence of uncertainty inherent in economic systems. Once the role of Keynesian uncertainty is acknowledged, the assumption of automatic equality between ex-post savings and ex-ante investment becomes untenable. This paper attempts to show that once this possibility of planned savings and investment inequality is incorporated in an otherwise essentially neoclassical model of economic growth, its closed system nature disappears and the model metamorphoses itself into an open system.
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Bibliographic InfoPaper provided by University of Stirling, Division of Economics in its series Stirling Economics Discussion Papers with number 2008-07.
Date of creation: Jun 2008
Date of revision:
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Postal: Division of Economics, University of Stirling, Stirling, Scotland FK9 4LA
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Keynesian uncertainty; technical progress function; Harrodian instability; growth and instability; closed systems; open systems;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-04 (All new papers)
- NEP-MAC-2008-11-04 (Macroeconomics)
- NEP-PKE-2008-11-04 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stein, Jerome L, 1969. ""Neoclassical" and "Keynes-Wicksell" Monetary Growth Models," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 1(2), pages 153-71, May.
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