Structural Change and Economic Growth: A Theoretical Essay on the Dynamics of the Wealth of Nations

Front Cover
CUP Archive, Mar 3, 1983 - Business & Economics - 300 pages
First published in 1981 this book presents an original theoretical treatment of the problems of maintaining full employment in a multisector economic system with a growing population and different rates of technical progress in different sectors. The conditions for full employment and full capacity utilisation are examined when prices are stable and when there is inflation. This approach is carried out, not in terms of input-output relations, as has become customary in multisector models, but rather in terms of vertically integrated sectors. This makes it possible to analyse the economic growth process in terms of the structural dynamics of production, of prices and of employment. Remarkable implications are drawn for a surprisingly large number of theoretical problems, which have been under discussion since Adam Smith: from price theory to the theory of rates of profit and the rates of interest; from production theory to the theories of fluctuating growth, ever-changing composition of output, choice of technique and international trade.
 

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Contents

Introduction 1 Foreword 2 The historical background of economic analysis
1
A hint at Mercantilism and at Physiocracy
4
The Classical approach to economic reality
5
Marginal economic analysis
8
Total profits and total wages an asymmetrical rela tion 143
9
New investments 144 10 New investments
10
The baffling 1870s
11
The theory of marginal productivity
14
The relation between the nominal rates of interest and the real rates of interest the standard real rate of interest
164
The correct problem concerning the rate of interest
166
Natural rate of interest and income distribution
168
The more general case of production with labour and capital goods
171
Rates of interest versus rates of profit
173
Rate of interest and rate of profit in capitalist econo mic systems
174
The accumulation of capital and related problems
176
Four quantitative notions of capital
177

New contributions to economic theory
17
An alternative conception of the material world
19
A pure production model 855FouPee
23
A multisector model of economic growth
27
Production in the short run 1 A welldiversified economic system
29
a very simple case
30
A necessary condition for full employment
33
Production by means of labour and capital goods
35
The physical stocks and flows of the economic system
37
The structure of prices
39
A more complex model involving capital goods for the production of capital goods
43
Simplifications 9 The equilibrium conditions
46
Towards a dynamic analysis
49
The simplest case of economic expansion population
50
A more complete formulation of the effective
56
A general multisector dynamic model
80
The empirical significance of vertically integrated analysis
109
Appendix to Chapter VIA criticism of the
118
The natural features of a growing economic system
127
The two basic functions of the price system
133
The dynamic paths of the wage rate and the rates
142
Total consumption
146
The consumption goods basis of a pure labour theory of value
148
Profits and savings in a capitalist economy
151
The role of institutions
153
The natural rate of interest
156
The emergence of financial assets and liabilities 156 2 The emergence of financial assets and liabilities 3 The emergence of a rate of interest
158
the same actual rate of interest
159
The nominal or money rate of interest
160
Price changes and the rate of inflation
161
The distinction essential for dynamic analysis
179
capital intensity versus degree of mechanisation or capitaloutput ratio versus capitallabour ratio
180
comparisons of different economic systems
184
The determinants of the choice of technique
191
economic system
198
The process of change of technique
205
Alternative criteria of neutrality of technical
212
The structural dynamics of a growing economic system
219
A digression on the relevant decisions at the level
225
The periodic recurrence of shortrun difficulties to full employment
232
Fluctuations in a process of economic growth
236
Says law and underconsumption theories a re appraisal
240
International economic relations
245
A fallacy arising from the HeckscherOhlin model
247
The primary source of international gains
249
The order of priority in the expansion of demand as a strict limitation to international learning
250
Trade a secondary source of international gains
253
The effects of international trade
256
Correcting two widespread views
258
The onceforall character of the gains from interna tional trade
260
The remarkable closedness of economic systems as regards productivity gains
261
International movements of workers and exploitation
262
A general principle of comparative productivity change advantage
263
Terms of trade between primary products and manu factures a digression
266
A special principle of comparative productivity change advantage and the structural dynamics of international trade
268
Economic policy implications
271
The wealth of nations
274
Index
277
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