R. F. Harrod

Keynes and Traditional Theory

In this paper I do not propose to ask or answer the question, has Keynes succeeded in establishing the propositions which he claims to have established ? nor again, what kind of evidence is required to establish or to refute those propositions? I shall confine myself to a narrower question, namely, what are the propositions which Keynes claims to have established ? And in order to restrict my subject matter still further, I propose to confine myself to those propositions, which he claims to have established, that are in conflict with the theory of value in the form in which it has hitherto been commonly accepted by most economists. In other words, my question is, what modifications in the generally recognised theory of value would acceptance of the propositions that Keynes claims to have established entail?

Doctrines of Imperfect Competition

I. Effects of imperfect competition on equilibrium theory. — Possibility of downward sloping demand curves, 442. — Particular sources of supply can have no decreasing costs, 443. — Limit of application of the new analysis, as regards monopoly and perfect competition, 445. — Some technical apparatus, 446. — A summary, 459. — II. Imperfect competition leads to distortion from the optimum distribution of resources, 461. — Price-fixing and fixing of wages may improve the distribution, 463. — III. The new analysis is important for trade cycle theory, 465. — Decreasing costs are possible for industries in short periods as well as in long, 465. — Examination of Pigous reasoning, 468. — Bearing on the psychological theory of the trade cycle, 469.

The Expansion of Credit in an Advancing Community

The question has been much discussed recently whether in an advancing community it is desirable that the general level of prices should remain constant or fall in proportion to the increase in the flow of goods. Grave difficulties beset any attempt to define the general level of prices, and these apply in connexion with either desideratum. When a fall of prices is considered, the weights used in the index number of prices should, of course, be the same as those used in defining the increase in the flow of goods.

Pure theory of growth economics

Since the war there has been a substantial corpus of literature about growth economics. I have preferred to call the pure theory of this subject Economic Dynamics. There is an analogy with mechanics, where we have statics and dynamics; I like to call my more basic contributions dynamics, rather than growth theory, since the laws of dynamics can relate to an instant of time; they analyse the forces causing bodies to be moving relatively to each other at a given moment. We may think of standing still and watching a railway train pass. Dynamics consists of an analysis of the causes of the rate at which it passes at a given moment of time. If the forces operating at that moment lead to acceleration, then the train will be proceeding more quickly further along the line. Growth, by contrast, essentially implies the passage of time. That is also an interesting subject. One might have three divisions of economic theory, namely into statics, dynamics and growth. Dynamic economics is not a new subject. There is more dynamics than statics in both Adam Smi th and R i c a r d o . They had it in mind to analyse the tendency towards a stationary state, where the economic magnitudes would no longer be changing relatively to one another. But the main part of their analysis related to steady rates of change. For a period in the later nineteenth century interest in dynamics or growth economics faded out. This was owing to the violent mental excitement caused by the simultaneous enunciation of the principle of Grenznutzen in Austria and by our Stanley J e v o n s in England. Alfred M a r s h a l l was the greatest British economist of the last third of the century. Actually, he anticipated the marginalists in the

Les relations entre l'investissement et la population

[eng] SUMMARY Population theory which was such au important ingredient of classical economics receives too little attention in current theory This is surprising since the volume of investment requirements receives great attention ami population increase is the most iir.portant element in these requirements By tlie use of fundamental dynam equation set out in arfU Dynamic Economics and elsewhere an attempt ia made to show tlie part played hy population increase in the dynamic equilibrium In the case of mature economies the population increase should make stagnation and recurrent recession less likely for two reasons First it raises the natu ral or maximum convenient rate of increase of output and thus makes it more likely that the economy can sustain warranted rate of increase without frequently going into downward spiral tilis warranted rate being that determined by Keynesian analysis as that which is barely sufficient to maintain progress under the profit incentive Secondly the increase in population tends to depress the warranted rate and thus contributes in this way also tovards making recurrent recessions less likely It is notable that the American stagnation of the thirties was accom panied by large fall in the rate of increase of population there and by sizeable fall in the rate of increase of working population Those who fear serious American recession in future may be encouraged by the fact th;it the prospective population increase will be considerably higher and more conducive to sustaining high employment

The Equilibrium of Duopoly

I propose solution of the problem of duopoly in a perfect market 2 on the arbitrary assumption that the particular demands, with which each duopolist is confronted, are linear functions.

Capital Output Ratio

The capital-output ratio is an expression increasingly used in economic literature, but not always unambiguously. The provision of a precise definition is not an altogether easy task. One may approach it by first considering the kindred concept of the capital-labour ratio.

The Life of John Maynard Keynes.

The Life of John Maynard Keynes traces the life and career of the famous English economist and evaluates his contribution to modern economic policy making.

A Further Note on Decreasing Costs

Interesting additions to the theory of decreasing costs have been made in recent numbers of the Economic Journal by Mrs. Robinson 1 and Mr. Shove; 2 complete precision in this field is almost within our grasp; certain obscurities, however, remain to be cleared up. In particular Mr. Shove’s criticism 3 of Mrs. Robinson has brought to light some difficulties connected with her conception of a normal rate of profit.

Price Flexibility and Employment.

this monograph presents a systematic investigation of the effect of price flexibility upon employment and economic stability.