Stability in Keynesian and neoclassical growth models: A comment on Kuipers

Summary

This article comments on a recent article by Kuipers on Keynesian and neoclassical theories of economic growth. It is argued that Kuipers' analysis of his Harrodian variant is too restrictive to answer the question of stability of the full-capacity steady growth path. An alternative Harrodian variant, which, in contrast to Kuipers' model, includes the possibility of unfulfilled demand growth expectations, is specified, and it is shown that this model is unstable. This result has important consequences for Kuipers' ranking of Keynesian and neoclassical theories in a general theory of economic growth according to their respectively medium-term and long-term character.