IDEAS home Printed from https://ideas.repec.org/a/hop/hopeec/v41y2009i5p67-87.html
   My bibliography  Save this article

Some Swedish Stepping-Stones to Growth Economics

Author

Listed:
  • Harald Hagemann

Abstract

Shortly after World War II growth theory came to occupy a central position in modern economics. Two of the most important early contributions were made by Harrod and Domar. Both aimed to extend Keynes's analysis in the General Theory into the long run by considering under what conditions a growing economy could realize full capacity utilization and full employment. Solow's neoclassical model came into existence as a reaction to the approaches by Harrod and Domar and some problems associated with it, as in particular the enormous instability. Solow saw the main reason for this “knife-edge” problem in the absence of any adjustment mechanism and based his alternative model on substitution between capital and labor in production and flexibility of factor prices. This article focuses on Solow's motivation and the main content of his approach in reaction to Harrod and Domar's impulse. Furthermore, focus is on the reactions by Harrod and Domar et al. as well as on the distinction between two different instability problems, namely, the divergence between the warranted and the natural rates of growth that marked Solow's starting point, and the divergence between the warranted and the actual rates of growth creating a business-cycle problem.

Suggested Citation

  • Harald Hagemann, 2009. "Some Swedish Stepping-Stones to Growth Economics," History of Political Economy, Duke University Press, vol. 41(5), pages 67-87, Supplemen.
  • Handle: RePEc:hop:hopeec:v:41:y:2009:i:5:p:67-87
    as

    Download full text from publisher

    File URL: http://hope.dukejournals.org/content/41/Suppl_1/67.full.pdf+html
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Philip Arestis & Peter Howells, 2002. "The 1520-1640 "Great Inflation": An Early Case of Controversy on the Nature of Money," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 24(2), pages 181-203, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Harrod-Domar Model;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hop:hopeec:v:41:y:2009:i:5:p:67-87. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Center for the History of Political Economy Webmaster). General contact details of provider: http://www.dukeupress.edu/Catalog/ViewProduct.php?viewby=journal&productid=45614 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.