文档介绍：Theories of Economic Growth
and The New Economy
By Steven A. Waller
Reviewed by Professor L. Randall Wray
Controversial Issues in Recent Economic Literature, Econ 508
University of Missouri - Kansas City
March 11, 2000
Last update: March 26, 2000
Introduction
The cause of economic growth is a hotly debated issue that has culminated in
recent years into a debate about what has been called "The New Economy."
The debate can be divided into two schools of thought; the
Keynesian/Institutionalist School and the Orthodox (or Neoclassical) School.
Both these schools of thought differ fundamentally in views on the way
growth is brought about and in the way it is sustained. The saving-
investment relation is at the heart of these differing theories. In a nutshell,
Neoclassical theory says es from savings and aggregate supply,
while Keynesian theory of es from spending and aggregate
demand. Of course it is plex than this simplistic view but it shows
how different the two are in formulating growth theory.
The Orthodox theory is grounded in the Classical "loanable funds" model.
This savings-centered philosophy is based on the supply of funds and it
allows the investment demand schedule to equilibrate at an interest rate.
The lower the savings rate, the greater will be the capital-output ratio.
Growth is a result of increased savings in their formula, g = s/k. 1 Where 'g' is
growth, 's' is savings (which equals investment), and 'k' is the capital
currently in place. This is the basic Harrod-Domar relationship for growth.
The Harrod model assumes economic instability. For the Neoclassicalists, if
left to its own devices, growth also seeks a steady equilibrium and it
challenges Keynes' notion that the economy is inherently unstable. But the
most important distinction in relation to growth is its supply orientation and
that supply is somehow limited or restricted. Other theories are similar to the
Orthodox (