Abstract
So-called classical models of economic growth, both those of the original authors of classical economics, such as Smith2 and Marx3, and of their modern successors, such as von Neumann,4 suggest that the decisive cause of high economic growth is a high investment ratio (or, as it is frequently put, a high rate of savings). Neoclassical models, on the other hand, imply that the rate of growth cannot be permanently increased by a higher rate of capital formation.
I am grateful to Mr R. C. O. Matthews, Professor G. O. Orosel, Professor G. Winckler and Dr G. Ostleitner for many helpful suggestions.
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Notes
K. Marx, Das Kapital, vol. 1 (Hamburg, 1867) ch. 22.
J. von Neumann, ‘A Model of General Economic Equilibrium’, Rev. Ec. Stud. xiii (1945–46) p. 1 ff.
See W. Schenk and G. Fink, ‘Das Bruttosachanlagevermögen der österreichischen Industrie 1955–1973’, Monatsber. d. Österr. Inst. f Wirtschaftsforschung, Vol. IL (10/1976) p. 459 seq., here p. 467.
See the many vintage capital models, starting with L. Johansen, ‘Substitution Versus Fixed Production Coefficients in the Theory of Economic Growth’, Em 27 (1959), p. 157ff.
R. M. Solow, ‘Substitution and Fixed Proportions in the Theory of Capital’, Rev. Ec. Stud. xxix (1962), p. 207ff.
See for instance N. Kaldor, ‘The Irrelevance of Equilibrium Economics’, EJ lxxxii (1972) p. 1237ff.
This is stressed by F. A. von Hayek, ‘Three Elucidations of the Ricardo Effect’, JPE lxxvii (1969) p. 274ff., here p. 282.
See, e.g., R. M. Coen and B. G. Hickman, ‘Constrained Joint Estimation of Factor Demand and Production Functions’, Rev. Ec. Stat. LII(1970)p. 287ff.;
Roy F. Harrod, Towards a Dynamic Economics (London, 1948).
E. Sheshinski, ‘Optimal Accumulation with Learning by Doing’; in K. Shell (ed.), Essays on the Theory of Economic Growth (Cambridge, Mass., and London, 1967) p. 31ff., here p. 33. ‘Arrow’ op. cit., p. 159.
As it is assumed e.g. by N. Kaldor and J. A. Mirrlees, ‘A New Model of Economic Growth’, RES xxix (1962) p. 174.
See e.g. D. R. Cox and H. D. Miller, The Theory of Stochastic Processes (London, 1965) p. 26 seq., p. 205 seq.
W. A. Eltis, Growth and Distribution (London, 1973) p. 82 seq.
See e.g., E. Burmeister and A. R. Dobell, Mathematical Theories of Economic Growth (London, 1970) p. 122, Theorem 5 (i); ibid. Theorem 5 (iv) and (v) together with p. 120, Theorem 3 (ii).
G. Mathur, Planning for Steady Growth (Oxford, 1965) p. 17 seq.
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© 1980 International Economic Association
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Streissler, E. (1980). Models of Investment-Dependent Economic Growth Revisited. In: Matthews, R.C.O. (eds) Economic Growth and Resources. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-04063-6_8
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