Keynesian Growth Theory

  • W. A. Eltis


A central feature of Keynesian theory is the importance which is attached to entrepreneurial investment decisions. These are assumed to be independent of saving decisions, and to have a dominant influence on the economy. In Keynes’s own work, they played a major role in the determination of effective demand and employment in the short run,1 and their influence on this will be analysed in Chapter 12 of the present book. It can be argued that investment decisions will also play a major role in the determination of the share of profits in the National Income, the rate of profit on capital, the rate of technical progress and the rate of growth. These possibilities will be outlined in turn in this chapter.


National Income Technical Progress Growth Theory Full Employment Price Inflation 
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  1. 1.
    J. M. Keynes, The General Theory of Employment, Interest and Money (Macmillan, 1936).Google Scholar
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    M. Kalecki, Theory of Economic Dynamics (Allen & Unwin, 1954).Google Scholar
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    L. L. Pasinetti, ‘Rate of profit and income distribution in relation to the rate of economic growth’, Review of Economic Studies, vol. XXIX (Oct 1962). See G. C. Harcourt, Some Cambridge Controversies in the Theory of Capital (Cambridge U.P., 1972) chap. 5, for an account of the subsequent literature.Google Scholar
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    W. A. Eltis, ‘Investment, technical progress and economic growth’, Oxford Economic Papers, vol. xv (Mar 1963) pp. 37-9.Google Scholar
  8. 1.
    H. Leibenstein, ‘Allocative efficiency versus X-efficiency’, American Economic Review, vol. lvi (June 1966).Google Scholar

Copyright information

© W. A. Eltis 1973

Authors and Affiliations

  • W. A. Eltis
    • 1
  1. 1.Exeter CollegeOxfordUK

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