Roy F Harrod essays

Roy F Harrod essays Roy F Harrod lived from 1900-1978. Roy Harrod taught economics, and produced his original contributions to the subject, at Oxford between 1924 and his retirement in 1967. Elected to a Lectureship at Christ Church Oxford in 1922, he then spent a few months at Cambridge with J.M. Keynes, with whom he remained in close touch for the rest of Keynes' life, and whose official biography he published in 1951. Harrod was a founder of the Oxford Economics Research Group along with Hubert Henderson and others. His unique contribution in urging a "dynamic" rather than "static" approach to economic issues was an Oxford contribution. He built upon Keynes theory of income determination, Evsey Domar also worked on independently is the Harrod-Domar model. A full explanation of Harrods model, Harrods first version of the idea was published in an essay in Dynamic Theory. He introduced the concepts of warranted growth, natural growth, and actual growth. His model showed that two kinds of problems could happen with growth rates. There was no necessary reason for actual growth to equal natural growth, and therefore no inherent tendency of the economy to reach full employment. But economists now believe that wage rates are fixed and the economy must use labor and capital in the same proportions. But most economist now believe rates can fall when the labor force increases. The second implied by Harrods model was unstable growth. If companies adjusted investments according to what they expected about future demands, and the anticipated demand was fore coming. This investment however would itself cause growth to rise acquiring even further investment, however itself would cause growth. The result would then be deceleration of growth, this property of Harrods growth model became known as Harrods knife edge. This uncomfortable conclusions was the result of two unrealistic assumptions made by Harrod. Harrods lasting contribution was to get economist thinking abo...