Re: WWW -- Harrod home-page (fwd)

[Steve Keen <s.keen@xxxxxxxxxx>]

When I get the time, I'll chase that reference up; thanks.

Daniele also sent the following replies to me, and asked me to copy them to
you and the list:

To: Steve Keen <s.keen@xxxxxxxxxxxxxxxxx> Subject: Re: WWW -- Harrod
home-page (fwd)
Dear Steve,
Thank you for forwarding this. Could you please pass a copy of my reply on
to Barkley Rosser as well?
As the remark that Kalecki pre-dated Harrod: firstly, Kalecki's paper,
although published in 1935 (Econometrica, and a less mathematical version
in French in the Revue D'Economie Politique) was read in 1933 at the
Econometrician's meeting, and was previously published in Polish. I would,
however, hesitate in calling it a multiplier-acceleration model. The
acceleration principle is surely there (Kalecki indeed got it from
Aftalion), but I am not so sure about the multiplier. A fundamental
ingredient of the multiplier is definitely present, namely, the inversion
of the causal nexus between saving and investment (or, in Kalecki's
version, profit and expenditure). There is also a formula involving the
equivalent of 1/s. But this is obtained in quite a different way from the
multiplier: Kalecki says that profit depends on the capitalists'
expenditure, and expenditure in part depends on profits (there is a
constant part + a variable part), and if the relationship is linear we have
a coefficient the denominator of which amounts to the saved part of
variable profit. Although the quantification of the effect of increased
expenditure on consumption looks very much like a multiplier, it only
spreads increases in consumption, not total expenditure, while for JMK the
effect is global, as it includes (and indeed is centred on) investment.
In his 1939 article cited by Barkley Rosser, Samuelson recognises Harrod's
as the first multiplier-accelerator model (pre-dating as it does Hansen and
Haberler). Did Samuelson know of Kalecki's model? I would think it unlikely
he didn't; if he did, he did not recognise K's model as including the
multiplier. Harrod as well knew of Kalecki (some correspondence survives
between them: Kalecki thanked Harrod for agreeing with his theory in spite
of not having understood the maths behind it, and suggested that Harrod
read the less mathematical version in French).
As to Goodwin: the story does not precisely run like that. Goodwin claimed
that he drew Harrod's attention on Tinbergen's review of The Trade Cycle in
German, where T. pointed out that Harrod's model, which contained no lags,
was not suitable for describing a cycle but only exponential growth (but T.
was wrong, because he transcribed H's model in terms of a linear
differential equation; but H's model is nonlinear -and not only for the
reason Goodwin explained years later, namely that the "ceiling" and "floor"
impose non-linearities-: both the multiplier and the accelerator change in
the course of the cycle, and this is fundamental to Harrod's theory).
Goodwin thus claimed he was responsible for re-addressing H's theory from
cycles to growth. But this is a myth, as shown by A. Jolink in the European
Journal Hist. Ec. Thought, 1995: Tinbergen sent himself his review to
Harrod (I suspect Harrod may have asked Goodwin's help for reading it, as
his German was rather poor. But this is just a conjecture. Harrod himself,
in 1964 correspondence with Matthews, did not recollect anything like that
-nor anything about Goodwin's role in the whole business).
In 1936 Goodwin was a graduate student at Oxford. Harrod was one of his
examiners.
I'd be glad to know how the Kalecki/multiplier argument strikes you, and
Barkley.
Thanks again for sending me this. Be well, Daniele


>Actually, I'd better consult Harrod's 1934 paper on imperfect competition,
>since I think it has some useful comments about the non-viability of supply
>and demand analysis in other than perfect competition.
Hmm, the chapter on Harrod and imperfect competition is interesting, but I
haven't fully written it. Up to 1934, he surely agreed with JVR and
Chamberlin on the use of supply and demand analysis, and he did so in 1936
as well (you surely remember my discussion of the "generalization" of
traditional theory). Then something changed. He abandoned his attempt to
give a macro-foundation to micro-theory (macro variables govern the cycle,
and via changes in prices induce individual entrepreneurs to adapt to these
fluctuations), but this could well be because of Hawtrey's crticism. NAd,
perhaps because of the Oxford Economists' Research Group's inquiry, which
questioned the assumption of entrepreneurs' rationality, he started
changing his mind. How, I haven't yet studied (I have gathered some
materials, which are waiting for some available time).
Cheers, Daniele

At 02:27 AM 5/24/01 Thursday, you wrote:
> Steve,
>       This is quite possible, although it was much later
> than Harrod wrote that Goodwin published anything
> on this.  But, given Goodwin's Sraffaesque approach
> to publishing that does not prove much.
>       Curiously enough, and not well known, it was
> Goodwin's 1951 paper on the nonlinear accelerator
> that triggered the first discovery of chaotic dynamics
> in economics, although the people who found it did not
> know what they had found.  That primordial reference is
>
> Strotz, Robert H., J.C. McAnulty, and Joseph B. Naines, Jr.
> "Goodwin's Nonlinear Model of the Business Cycle: An
> Electro-Analog Solution," Econometrica 21 (1953), 390-411.
>
>      Of course Goodwin himself would become involved
> in studying chaotic economic dynamics in the 1980s under
> the influence of Richard H. Day.
> Barkley Rosser
> James Madison University
> rosserjb@xxxxxxx
> http://cob.jmu.edu/rosserjb
> ----- Original Message -----
> From: "Steve Keen" <s.keen@xxxxxxxxxxxxxxxxx>
> To: "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>
> Cc: <dbesomi@xxxxxxxxxxxxx>
> Sent: Tuesday, May 22, 2001 9:25 PM
> Subject: Re: WWW -- Harrod home-page (fwd)
>
>
> > Also, Richard Goodwin claimed that he gave Harrod the idea of the
> > multiplier-accelerator some years earlier, when RG was an undergraduate(?)
> > student of Harrod's. Given RG's technical prowess and personal modesty, I
> > take this claim seriously. But I think Daniele does deal with these issues
> > in more detail in his equally excellent book on Harrod:
> >
> > Daniele Besomi, _The Making of Harrod's Dynamics_. St Martin's Press New
> > York (and MacMillan London), 1999. Published in the _Studies in the
> history
> > of economics_ series (D.E. Moggridge ed.). xiib + 289 pp. $75.00
> > (hardcover). ISBN: 0-312-21908-3.
> >
> > Cheers,
> > Steve
> > At 05:32 AM 5/23/01 Wednesday, you wrote:
> > >       Nice website, but it is at least slightly misleading
> > >in its cover remarks. It seems to imply that Harrod
> > >was the first to show a multiplier-accelerator model
> > >of the trade cycle.  His 1936 article did precede most
> > >others, including the more widely cited one by Samuelson
> > >in 1939.  But Kalecki beat him to the punch in 1935.
> > >       Although Kahn may have come up with multiiplier
> > >only in the early 1930s, Aftalion had posited the accelerator
> > >as early as 1913, and clearly saw it as a mechanism for
> > >explaining cyclical fluctuations.
> > >Barkley Rosser
> > >----- Original Message -----
> > >From: "Alan G. Isaac" <aisaac@xxxxxxxxxxxx>
> > >To: "Post Keynesian Theory" <pkt@xxxxxxxxxxxxxxxx>
> > >Sent: Sunday, May 20, 2001 10:51 PM
> > >Subject: HES: WWW -- Harrod home-page (fwd)
> > >
> > >
> > > > This shd interest list members.
> > > > Alan Isaac
> > > >
> > > > ---------- Forwarded message ----------
> > > > From: Daniele Besomi <dbesomi@xxxxxxxxxxxxx>
> > > > To: hes@xxxxxx
> > > > Subject: HES: WWW -- Harrod home-page
> > > >
> > > > I have posted a Harrod home page at
> > > >
> > > > http://www.dplanet.ch/users/dbesomi/Harrod-Home/welcome.htm
> > > >
> > > > It contains biographical and bibliographical materials, a number of
> > > > Harrod's own texts (in pdf format), secondary literature, references
> > > > to archival resources, and links to other materials relating to Harrod
> > > > on the web.
> > > >
> > > > Comments, suggestions and reports of bugs are welcome.
> > > >
> > > >
> >
> > Home Page: http://bus.uws.edu.au/steve-keen/
> >              http://www.debunking-economics.com
> >              http://www.stevekeen.net
> > Dr. Steve Keen
> > Senior Lecturer
> > Economics & Finance
> > Campbelltown, Building 11 Room 30,
> > School of Economics and Finance
> > UNIVERSITY WESTERN SYDNEY
> > LOCKED BAG 1797
> > PENRITH SOUTH DC NSW 1797
> > Australia
> > s.keen@xxxxxxxxxx 61 2 4620-3016 Fax 61 2 4626-6683
> > Home 02 9558-8018 Mobile 0409 716 088
> >
> >

Home Page: http://www.debunking-economics.com
            http://bus.uws.edu.au/steve-keen/
            http://www.stevekeen.net
Dr. Steve Keen
Senior Lecturer
Economics & Finance
Campbelltown, Building 11 Room 30,
School of Economics and Finance
UNIVERSITY WESTERN SYDNEY
LOCKED BAG 1797
PENRITH SOUTH DC NSW 1797
Australia
s.keen@xxxxxxxxxx 61 2 4620-3016 Fax 61 2 4626-6683
Home 02 9558-8018 Mobile 0409 716 088