From a Dynamics of Causes to a Dynamics of Effects: the ‘Essay in Dynamic Theory’

Abstract

The two years that intervened between the publication of The Trade Cycle and the writing of the first draft of the ‘Essay in Dynamic Theory’ saw quite a radical evolution of Harrod’s notion of dynamics and of his theory of cyclical growth.¹ In truth, Harrod claimed continuity between his two works: both in the foreword of his 1936 book and in the first lines of his 1939 article on economic dynamics, Harrod maintained that his theory was based on two principles: ‘it […] consists in a marriage of the “acceleration principle” and the “multiplier” theory’. The ‘Essay’, according to Harrod, was meant to provide ‘a development and extension of certain arguments advanced in [his] Essay on the Trade Cycle’ (Harrod 1936a, p. vii, and 1939a, p. 14).²