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Neoclassical Growth Theory and Heterodox Growth Theory: Opportunities For (and Obstacles To) Greater Engagement

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  • Mark Setterfield

    (Department of Economics, Trinity College, Hartford, CT 06106, USA.)

Abstract

This article explores the possibilities for greater engagement between neoclassical and heterodox growth theorists. Simple structural models are used to identify the essential “mechanics” of the growth process in both the neoclassical and heterodox traditions, and these are shown to point to important areas of theoretical overlap and even observational equivalence. In particular, the interaction of trend and cycle — and more specifically, the influence of demand on long-run growth — is identified as an emerging “common front” in growth theory. Rhetorical and sociological obstacles to greater engagement are identified, but it is argued that these should not be allowed to thwart profitable interactions among researchers from different traditions.

Suggested Citation

  • Mark Setterfield, 2014. "Neoclassical Growth Theory and Heterodox Growth Theory: Opportunities For (and Obstacles To) Greater Engagement," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 40(3), pages 365-386, June.
    • Handle: RePEc:pal:easeco:v:40:y:2014:i:3:p:365-386
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    Cited by:

    1. Daniele Tavani & Luca Zamparelli, 2017. "Endogenous Technical Change In Alternative Theories Of Growth And Distribution," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1272-1303, December.
    2. Mario Cimoli & Gabriel Porcile, 2014. "Technology, structural change and BOP-constrained growth: a structuralist toolbox," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(1), pages 215-237.
    3. Cimoli, Mario & Fleitas, Sebastian & Porcile, Gabriel, 2011. "Real Exchange Rate and the Structure of Exports," MPRA Paper 37846, University Library of Munich, Germany.
    4. Senderski, Marcin, 2014. "Ecumenical foundations? On the coexistence of Austrian and neoclassical views on utility," MPRA Paper 67024, University Library of Munich, Germany.
    5. Guarini, Giulio & Porcile, Gabriel, 2016. "Sustainability in a post-Keynesian growth model for an open economy," Ecological Economics, Elsevier, vol. 126(C), pages 14-22.
    6. Mark Setterfield, 2023. "Will hysteresis effects afflict the US economy during the post-COVID recovery?," Working Papers 2306, New School for Social Research, Department of Economics.
    7. Attar, M. Aykut, 2021. "Growth, distribution and dynamic inefficiency in Turkey: An analysis of the naïve neoclassical theory of capital," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 20-30.
    8. Mario Cimoli & Gabriel Porcile & Antonio Martins Neto & Fernando Sossdorf, 2017. "Productivity, social expenditure and income distribution in Latin America," Brazilian Journal of Political Economy, Center of Political Economy, vol. 37(4), pages 660-679.
    9. Eva Yamila Catela & Mario Cimoli & Gabriel Porcile, 2015. "Productivity and Structural Heterogeneity in the Brazilian Manufacturing Sector: Trends and Determinants," Oxford Development Studies, Taylor & Francis Journals, vol. 43(2), pages 232-252, June.

    More about this item

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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