Harrod's Dynamics in the Making

Blanqui Lecture, European Society for the History of Economic Thought, Darmstadt, February 2001


This essay analyses the origin and early development of Harrod's notion of dynamics, focusing in particular on the role of the instability principle. This originated, logically and chronologically, before Harrod developed his trade cycle mechanism: Harrod believed that, for an explanation of the cycle to be possible at all, the system should be supplied with an endogenous factor permitting the system to escape from a state of equilibrium. The principle was applied twice in Harrod's book on The Trade Cycle, to permit movement by enabling the system to abandon the rest state of static equilibrium and successively to generate the cycle by amplifying deviations from the moving equilibrium of a growing system. Harrod's attempts &emdash;not all successful&emdash; to tackle the logical and analytical problems involved in his theory, as they resulted from the comments its successive reformulations received in the course of three decades are surveyed. The essay stresses the importance for the understanding of the issues of the study of the various debates in which Harrod was involved, in published writings or in correspondence, and concludes with a plea for archival research.

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