Instability in a Market Economy and the Harrod Growth Model

Citation

Ghosh D (2009) Instability in a Market Economy and the Harrod Growth Model. Stirling Economics Discussion Paper, 2009-11.

Abstract
What is very often overlooked in the literature is that the Harrod’s Post- Keynesian growth model is more to do with the problem of instability in a market economy which is caused by the role of expectations of the investors. The neoclassical model of growth due to Solow achieves stability not due to its assumption of smooth twice differentiable production function but assuming away the role of uncertainty.

Keywords
Instability; Post-Keynesian Growth; Role of Expectation; Uncertainty; Open system; Economic development Mathematical models; Keynesian economics; Money; Economics

JEL codes

• E12: General Aggregative Models: Keynes; Keynesian; Post-Keynesian
• E13: General Aggregative Models: Neoclassical
• O40: Economic Growth and Aggregate Productivity: General