The New Palgrave Dictionary of Economics

Living Edition
| Editors: Matias Vernengo, Esteban Perez Caldentey, Barkley J. Rosser Jr

Accumulation of Capital

Living reference work entry


The accumulation of capital has been analysed by economists in two very different ways. The most common has been to see it as the expansion of the productive potential of an economy with a given technology, which may be improved in the process. But it has also been understood as the outright transformation of the technical and productive organization of the economy. The first approach leads to analyses based on the idea of steady growth, subsuming the concerns of the second under the heading of ‘technical progress’. Such an approach rests on a conception of capital as productive goods or, in more sophisticated versions, as a fund providing command over productive goods. This is not wrong; it is merely inadequate. Capital must also be understood as a way of organizing production and economic activity, so that the accumulation of capital is the extension of this form of organization into areas in which production, exchange and distribution were governed by other rules. This conception of capital emphasizes the importance of organization; so understood, technology and engineering are not abstract science, they are ways of organizing production, and so have an institutional dimension. Accumulation then implies the transformation of institutions as well as production, and steady growth is not applicable (except perhaps as a benchmark).


Real Wage Marginal Product Technical Progress Natural Rate Output Ratio 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
This is a preview of subscription content, log in to check access.


  1. Domar, E.D. 1946. Capital expansion, rate of growth and employment. Econometrica 14: 137–147.CrossRefGoogle Scholar
  2. Harrod, R.F. 1939. An essay in dynamic theory. Economic Journal 49: 14–33.CrossRefGoogle Scholar
  3. Hicks, J. 1965. Capital and growth. Oxford: Oxford University Press.Google Scholar
  4. Kaldor, N. 1956. Alternative theories of distribution. Review of Economic Studies 23: 83–100.CrossRefGoogle Scholar
  5. Keynes, J.M. 1936. The general theory of employment, interest and money. London: Macmillan.Google Scholar
  6. Laibman, D., and E.J. Nell. 1977. Reswitching, Wickell effects and the neo-classical production function. American Economic Review 67: 878–888.Google Scholar
  7. Lowe, A. 1976. The path of economic growth. New York: Cambridge University Press.CrossRefGoogle Scholar
  8. Marx, K. 1867–1894. Capital, vols. I, II, III. Moscow: Progress Publishers, n.d.Google Scholar
  9. Nell, E.J. 1982. Growth, distribution and inflation. Journal of Post-Keynesian Economics 5: 104–113.CrossRefGoogle Scholar
  10. Nell, E.J. 1986. Priority and public spending. London: George Allen & Unwin.Google Scholar
  11. Ricardo, D. 1817. On the principles of political economy and taxation. Vol. I of The works and correspondence of David Ricardo, ed. P. Sraffa. Cambridge: Cambridge University Press, 1951.Google Scholar
  12. Robinson, J. 1956. The accumulation of capital. London: Macmillan.Google Scholar
  13. Robinson, J. 1962. Essays in the theory of economic growth. London: Macmillan.CrossRefGoogle Scholar
  14. Solow, R. 1956. A contribution to the theory of economic growth. Quarterly Journal of Economics 70: 65–94.CrossRefGoogle Scholar
  15. Solow, R. 1962. Substitution and fixed proportions in the theory of capital. Review of Economic Studies 29: 207–218.CrossRefGoogle Scholar
  16. Sraffa, P. 1960. Production of commodities by means of commodities. Cambridge: Cambridge University Press.Google Scholar
  17. Uzawa, H. 1961. On a two-sector model of economic growth. Review of Economic Studies 24: 40–47.CrossRefGoogle Scholar
  18. Von Neumann, J. 1937. A model of general economic equilibrium. Review of Economic Studies 13(1945–6): 1–9.Google Scholar

Authors and Affiliations

  1. 1.