The Determination of the Share of Investment, the Rate of Profit and the Rate of Growth

Abstract

It was shown in Chapter 9 that sufficient equations have now been arrived at to determine the equilibrium values of the share of investment, the rate of profit and the rate of growth. This means that it is now possible to analyse the full influence of opportunities for growth, and preferences between consumption and growth on the equilibrium values of these variables. Different economies will have different opportunities for growth, for the rate of growth of the labour force and the coefficients of the technical progress function will vary between economies. The extent to which opportunities for growth are exploited will also vary between economies, for the wealth owners of each country will have different preferences between consumption and growth. The opportunities for growth and the preferences between consumption and growth will determine the equilibrium values of S, r and g of each economy. It will be interesting to know how strong the various influences are, and there are questions of particular importance which it may be possible to answer.