[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/swe/wpaper/2008-12.html
   My bibliography  Save this paper

Escaping from a Blind Alley: Disequilibrium in the Dynamic Analysis of Harrod and Kalecki

Author

Listed:
  • Peter Kriesler

    (School of Economics, University of New South Wales)

  • J W Nevile

    (School of Economics, University of New South Wales)

Abstract
The pioneers of dynamic Keynesian economics, Harrod and Kalecki, began with an analysis of the trade cycle, but are remembered for their contributions to growth theory. Unlike most twentieth century growth theory, they both had a major focus on disequilibrium situations and an examination of this aspect of their theory is the purpose of this paper. Harrod distinguished three stages in his dynamic analysis. The first was the derivation of the fundamental equation and consequent theorems. Fundamental meant underlying: even apart from random factors the equation may never hold exactly in real life. In the second stage, detailed analysis was made of the factors (in addition to the fundamental equation) which have a systematic effect on the path the economy follows. The final stage is policy prescriptions. Except in his 1936 book on the trade cycle, Harrod did relatively little “second stage” work but this did not stop him putting forward policy prescriptions. This three stage structure of analysis contributed to the widespread misunderstanding of the nature of his fundamental equation leading to a widely accepted view of a Harrod growth model which was completely different to what Harrod thought he was putting forward. Kalecki, on the other hand, rejected what Harrod had called “first stage analysis” as being of little interest. His main criticisms of growth theory were aimed at, what he saw, as the vacuousness of such theorising. Instead, his work concentrated on second and third stage analysis, that is, in attempting to understand the non-equilibrium, dynamics of the economy with a view towards policy prescription. For this reason, Kalecki’s contribution was less open to misunderstanding than was Harrod’s.

Suggested Citation

  • Peter Kriesler & J W Nevile, 2008. "Escaping from a Blind Alley: Disequilibrium in the Dynamic Analysis of Harrod and Kalecki," Discussion Papers 2008-12, School of Economics, The University of New South Wales.
    • Handle: RePEc:swe:wpaper:2008-12
    as

    Download full text from publisher

    File URL: http://wwwdocs.fce.unsw.edu.au/economics/Research/WorkingPapers/2008_12.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
    2. Peter Kriesler & J. W. Nevile, 2012. "Dynamic Keynesian economics: cycling forward with Harrod and Kalecki," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(2), pages 405-417.
    3. Besomi, Daniele, 1996. "Introduction to "An Essay in Dynamic Theory": 1938 Draft by Roy F. Harrod," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 28, pages 245-251.
    4. Daniele Besomi, 1998. "Failing to Win Consent: Harrod’s Dynamics in the Eyes of His Readers," Palgrave Macmillan Books, in: Giorgio Rampa & Luciano Stella & A. P. Thirlwall (ed.), Economic Dynamics, Trade and Growth, chapter 2, pages 38-88, Palgrave Macmillan.
    5. Giorgio Rampa & Luciano Stella & A. P. Thirlwall (ed.), 1998. "Economic Dynamics, Trade and Growth," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-26931-0, October.
    6. Daniele Besomi, 1996. "An Additional Note on the Harrod-Keynes Correspondence," History of Political Economy, Duke University Press, vol. 28(2), pages 281-294, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. G. C. Harcourt, 2015. "Fusing indissolubly the cycle and the trend: Richard Goodwin’s profound insight," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 39(6), pages 1569-1578.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miguel A. LeÛn-Ledesma & A. P. Thirlwall, 2002. "The endogeneity of the natural rate of growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(4), pages 441-459, July.
    2. D. Besomi, 1999. "Harrod on the classification of technological progress. The origin of a wild-goose chase," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 52(208), pages 95-117.
    3. Pilar Lopez-Llompart & G. Mathias Kondolf, 2016. "Encroachments in floodways of the Mississippi River and Tributaries Project," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(1), pages 513-542, March.
    4. Cheng, Jianquan & Bertolini, Luca, 2013. "Measuring urban job accessibility with distance decay, competition and diversity," Journal of Transport Geography, Elsevier, vol. 30(C), pages 100-109.
    5. M. De Donno & M. Pratelli, 2006. "A theory of stochastic integration for bond markets," Papers math/0602532, arXiv.org.
    6. Prilly Oktoviany & Robert Knobloch & Ralf Korn, 2021. "A machine learning-based price state prediction model for agricultural commodities using external factors," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 44(2), pages 1063-1085, December.
    7. Michelle Sheran Sylvester, 2007. "The Career and Family Choices of Women: A Dynamic Analysis of Labor Force Participation, Schooling, Marriage and Fertility Decisions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 367-399, July.
    8. Henrekson, Magnus & Johansson, Dan, 2010. "Firm Growth, Institutions and Structural Transformation," Ratio Working Papers 150, The Ratio Institute.
    9. Karen K. Lewis, 2011. "Global Asset Pricing," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 435-466, December.
    10. DAVID M. BLAU & WILBERT van der KLAAUW, 2013. "What Determines Family Structure?," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 579-604, January.
    11. Panagiota DIONYSOPOULOU & Georgios SVARNIAS & Theodore PAPAILIAS, 2021. "Total Quality Management In Public Sector, Case Study: Customs Service," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 153-168, June.
    12. Afanasyev, Dmitriy O. & Fedorova, Elena A. & Popov, Viktor U., 2015. "Fine structure of the price–demand relationship in the electricity market: Multi-scale correlation analysis," Energy Economics, Elsevier, vol. 51(C), pages 215-226.
    13. Peter Viggo Jakobsen, 2009. "Small States, Big Influence: The Overlooked Nordic Influence on the Civilian ESDP," Journal of Common Market Studies, Wiley Blackwell, vol. 47(1), pages 81-102, January.
    14. Julie Holland Mortimer, 2007. "Price Discrimination, Copyright Law, and Technological Innovation: Evidence from the Introduction of DVDs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(3), pages 1307-1350.
    15. Suwan Shen & Xi Feng & Zhong Ren Peng, 2016. "A framework to analyze vulnerability of critical infrastructure to climate change: the case of a coastal community in Florida," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(1), pages 589-609, October.
    16. Jean-Bernard Chatelain & Kirsten Ralf, 2017. "Can We Identify the Fed's Preferences?," Working Papers halshs-01549908, HAL.
    17. Billio, Monica & Casarin, Roberto & Osuntuyi, Anthony, 2016. "Efficient Gibbs sampling for Markov switching GARCH models," Computational Statistics & Data Analysis, Elsevier, vol. 100(C), pages 37-57.
    18. Jan Babecký & Fabrizio Coricelli & Roman Horváth, 2009. "Assessing Inflation Persistence: Micro Evidence on an Inflation Targeting Economy," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 59(2), pages 102-127, June.
    19. Lloyd, S. P., 2017. "Unconventional Monetary Policy and the Interest Rate Channel: Signalling and Portfolio Rebalancing," Cambridge Working Papers in Economics 1735, Faculty of Economics, University of Cambridge.
    20. Fischer, Andreas M. & Ranaldo, Angelo, 2011. "Does FOMC news increase global FX trading?," Journal of Banking & Finance, Elsevier, vol. 35(11), pages 2965-2973, November.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:swe:wpaper:2008-12. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hongyi Li (email available below). General contact details of provider: https://edirc.repec.org/data/senswau.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.