The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Classical Growth Model

  • Donald J. Harris
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_3037

Abstract

The classical economists provided an account of the broad forces that influence economic growth and of the mechanisms underlying the growth process, stressing accumulation and productive investment of a part of the social surplus in the form of profits. Changes in the rate of profit were decisive for analysis of the long-term evolution of the economy. The analysis indicated that in a closed economy there is an inevitable tendency for the rate of profit to fall. In this article, the essential features of the classical analysis of the accumulation process are presented and formalized in terms of a simple model.

Keywords

Capital accumulation Capitalism Class Classical economics Classical growth model Corn as basic commodity Corn Laws Diminishing returns Dismal science Distribution theories, classical Division of labour Economic growth Falling tendency of the rate of profit Household production Labour productivity Labour supply Malthus, T. R. Malthus’s theory of population Marx, K. H. Physiocracy Population growth Progress Rate of profit Reserve army of labour Ricardo, D. Smith, A. Stationary state Subsistence Surplus Technical change Value Wages fund 

JEL Classifications

O4 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Donald J. Harris
    • 1
  1. 1.