R. M. Solow: Rate of Profit and Return on Investment
In his recent work1 Robert Solow has not produced what could be called a full-blown model of economic growth. The models that Solow (occasionally in collaboration with Samuelson) has put forward have been primarily generalisations of earlier work by Ramsey, von Neumann and Harrod, incorporating linear, homogeneous production functions, usually of the Cobb—Douglas variety, into the original models.2 Solow’s justification for this approach is that ‘One usually thinks of the long run as the domain of neoclassical analysis, the land of the margin’.3
KeywordsProduction Function Marginal Product Technical Progress Neoclassical Theory Marginal Analysis
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- 2.See J. K. Galbraith, The New Industrial State (Boston: Houghton-Mifflin, 1967) 86-108, for an alternative view of what the world of production planning is like in even an unplanned economy.Google Scholar