The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Cumulative Causation

  • Carlos J. Ricoy
Reference work entry


The notion of ‘cumulative causation’ constitutes a basic hypothesis on the workings of the market mechanism. The operation of markets is conceived as a continuous process in which economic forces interact upon one another in a cumulative way, thus making for changes in one direction to induce supporting changes which push the system further away from its initial position. In essence, this is the notion which Myrdal refers to as the ‘principle of circular and cumulative causation’ and which plays an organizing role in his analysis of ‘uneven development’ (Myrdal 1957).

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Carlos J. Ricoy
    • 1
  1. 1.