Harrod–Domar Growth Model
The Keynesian revolution led Roy Harrod (1939) and Evsey Domar (1946 and 1947) to work out the implications of permanent full employment. In The General Theory of Employment, Interest and Money (1936) Keynes himself showed how full employment could be reached, but he made no attempt to work out the long-term conditions which must be satisfied before an economy can continue to produce at that level. Harrod’s and Domar’s analyses of this problem show that long-term full employment requires that two fundamental conditions be satisfied.
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