Roy Harrod
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Roy Harrod
(1900–1978) The first economist to reconcile Keynesian economics to models of steady state economic growth—the latter a major topic of economic inquiry since Adam Smith . This work—especially The Trade Cycle (1936)—was the first step in the revival of growth theory .
Harrod was educated at the University of Oxford, but also spent time at Cambridge University, where John Maynard Keynes was among his teachers. The main innovation in what came to be known as the Harrod–Domar growth model was the moving equilibrium growth path. Keynesian macroeconomics required that, at equilibrium, savings are continually turned into investment. Harrod used the acceleration principle to show that the growth rate at which a firm's level of investment equals savings was equal to the ratio of the savings rate to the change in investment due to a change in output. If the actual growth rate is above this equilibrium or warranted growth rate, then there will be a continual acceleration of growth. If the actual growth rate falls short of the warranted rate, the economy decelerates. This finding is known as Harrod's knife-edge problem.
Further research specified the circumstances under which Harrod's knife-edge could be avoided: a high marginal propensity to save and largely autonomous investment, so that investment responds less than proportionately to an increase in output. Most of Harrod's work in the 1940s focused on exploring the differences between the warranted growth rate with the natural growth rate, which he viewed as a function of population dynamics and technical change. He later argued that the rate of technical progress could be derived by measuring the increase in labor productivity that does not change the value of the capital coefficient at a given rate of interest. This concept has since become known as Harrod-neutral technical change. .
Harrod pointed out that equilibrium growth was not possible when the warranted rate and natural rate were unequal. Later developments in neoclassical growth theory (for example, the Solow–Swan model) suggested that the warranted rate and the natural rate could be equalized at an appropriate rate of interest (see Robert Solow). Harrod disagreed with this and remained a stalwart Keynesian in most respects—despite Keynes's own misgivings about growth theory. Harrod felt that only persistent government intervention could reconcile the warranted and natural growth rates, and thereby ensure equilibrium growth.
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Roy Harrod
| Neo-Keynesian economics | |
|---|---|
| Born | February 13, 1900 London |
| Died | March 8, 1978 (aged 78) Holt, Norfolk |
| Nationality |  United Kingdom |
| Alma mater | New College, Oxford |
| Contributions | Harrod–Domar model |
Sir Henry Roy Forbes Harrod (February 13, 1900 – March 8, 1978) was an English economist. He is best known for his biography of John Maynard Keynes and the development of the Harrod–Domar model, which he and Evsey Domar developed independently. He is also known for his International Economics, a former standard textbook, the first edition of which contained some observations and ruminations (wanting in subsequent editions) that would foreshadow theories developed independently by later scholars (such as the Balassa-Samuelson effect).
Born in London[1] he attended St Paul's and then Westminster School. Harrod attended New College in Oxford on a history scholarship. After a brief period in the Artillery in 1918 he gained a first in "literae humaniores" in 1921, and a first in modern history the following year. Afterwards he spent some time in 1922 at King's College, Cambridge. It was there that he met and befriended Keynes.[citation needed]
After moving back to Oxford, he became a Student (i.e. Fellow) and Tutor in economics at Christ Church. He held the fellowship in modern history and economics until 1967. He was still in contact with Keynes and was later his biographer. He was additionally a Fellow at Nuffield College 1938 to 1947 and from 1954 to 1958.
He married Wilhelmine Cresswell (Billa), step-daughter of General Peter Strickland, in 1938.[2]
During the Second World War, he was briefly in Winston Churchill's "S branch" - a statistical section within the Admiralty.
After retiring in 1967, he moved to Holt, Norfolk
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Contents
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List of works
- "Doctrines of Imperfect Competition," Quarterly Journal of Economics 48 (May 1934), 442–470.
- "The expansion of Credit in an Advancing Community", Economica NS 1 (August 1934), 287-299.
- The Trade Cycle (Oxford: Clarendon Press, 1936).
- "Mr. Keynes and Traditional Theory," Econometrica NS 5 (January 1937), 74-86.
- "Scope and Method of Economics," Economic Journal 48 (Sept. 1938), 383–412.
- "An Essay in Dynamic Theory," Economic Journal 49 (March 1939), 14–33.
- International economics (London: Nisbet, and Cambridge: Cambridge University Press; New York: Harcourt and Brace). Five editions from 1939 to 1973.
- Towards a Dynamic Economics (London: Macmillan, 1948)
- The Life of John Maynard Keynes (London: Macmillan, 1951)
- "Economic Essays" (London: Macmillan, 1952)
- Foundations of Inductive Logic (1956).
- The Prof: A Personal Memoir of Lord Cherwell (London, Macmillan, 1959)
- "Domar and Dynamic Economics," Economic Journal 69 (September 1959), 451–464.
- "Second Essay in Dynamic Theory," Economic Journal 70 (June 1960), 277–293.
- "Themes in Dynamic Theory," Economic Journal 73 (September 1963), 401–421.
- Sociology, Morals and Mystery, (London: Macmillan, 1970).
- Economic Dynamics (London: Macmillan, 1973).
- The Interwar Correspondence of Roy Harrod (Cheltenham: Elgar, 2003).
Notes
- ^ Oxford DNB
- ^ Times Obituary of Lady Harrod
References
- P. M. Oppenheimer, ‘Harrod, Sir (Henry) Roy Forbes (1900–1978)’, rev. Oxford Dictionary of National Biography, Oxford University Press, 2004; online edn, May 2010 accessed 8 Oct 2011
External links
- The History of Economic Thought Website - Sir Roy F. Harrod, 1900-1978 (archived)
- The Roy Harrod Page
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