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Cambridge Distribution in a World Economy


  • Joan O'Connell

    (Department of Economics, National University of Ireland, Galway)


The paper outlines a two-country Cambridge model of growth and distribution. The condition for the Cambridge equation to apply to the world economy is outlined. When this is satisfied, a dual theorem holds in one of the two countries, and the country with the greater aggregate savings ratio is in current account surplus. The original Cambridge model was formulated as a means of equating the warranted and natural growth rates of Harrod (1939) and Domar (1946) for the case of a closed economy. Thus, the world version is a method of satisfying Harrod's requirement that his model be capable of extension so as to include foreign trade.

Suggested Citation

  • Joan O'Connell, 1999. "Cambridge Distribution in a World Economy," Working Papers 42, National University of Ireland Galway, Department of Economics, revised 1999.
  • Handle: RePEc:nig:wpaper:0042

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    References listed on IDEAS

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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies


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