The analysis of Part II of this book was largely confined to steady growth comparisons, and economies with different investment functions and different investment opportunity functions were compared to see how these would influence the equilibrium values of the major economic variables. However, because growth had to be ‘steady’, certain factors which play an important role in the growth and development of economies were neglected.
KeywordsIncome Distribution Capital Accumulation Marginal Product Technical Progress Steady Growth
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- 1.Allyn Young, ‘Increasing returns and economic progress’, Economic Journal, vol. xxxvIII (Dec 1928).Google Scholar
- 3.N. Kaldor, Causes of the Slow Rate of Growth of the United Kingdom, Inaugural Lecture (Cambridge U.P., 1966).Google Scholar
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- 1.Cf. F. H. Hahn and R. C. O. Matthews, ‘The theory of economic growth: a survey’, Economic Journal, vol. LXXIV (Dec 1964) p. 833.Google Scholar
- 1.See C. M. Kennedy, ‘Induced bias in innovation and the theory of distribution’, Economic Journal, vol. LXXIV (Sep 1964).Google Scholar
- 1.One estimate suggests that the ‘property share’ in the U.S. National Income fell fairly steadily from 30.6 per cent in 1900-9 to 22-4 per cent in 1954-63. (Bernard F. Haley, ‘Distribution in the United States’, in the Proceedings of the International Economic Association Conference on The Distribution of National Income, ed. Jean Marchal and Bernard Ducros, Macmillan, 1968.) John W. Kendrick and Ryuzo Sato have estimated that the property share fell from 28-0 per cent in 1919 to 22.2 per cent in 1960, and that the capital-output ratio fell very drastically from 4.58 to 2-62 in the same period (‘Factor prices, productivity and economic growth’, American Economic Review, vol. LIII, Dec. 1963). More conservatively, L. R. Klein and R. F. Kosobud have estimated that the ratio capital stock/Net National Product fell from 3-987 in 1900 to 2.55 in 1953 (‘Some econometrics of growth: great ratios of economics’, Quarterly Journal of Economics, vol. LXXV, May 1961). These estimates suggest that the rate of fall of the capital-output ratio may have been rather faster than that suggested by (11.20). This could be the result of a rising r, or technical progress nearer to Hicks than to Harrod neutrality, so that there was some capital augmentation from technical progress in addition to that produced by increasing returns to scale.Google Scholar