Economics Dictionary of ArgumentsHome
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| Accumulation: Accumulation in economics refers to the process of investing in capital, labor, and technology to enhance productivity and economic growth. It involves reinvesting profits to expand production capacity and improve efficiency, contributing to long-term economic development._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Luigi Pasinetti on Accumulation - Dictionary of Arguments
Kurz I 265 Accumulation/Pasinetti/Rebelo/Kurz: Pasinetti (1960)(1) reformulated the Ricardian theory of accumulation in terms of a two-sector model involving three social classes: workers, capitalists, and landlords. Rebelo (1991)(2) introduced another model in order to Show that increasing returns are not necessary to obtain endogenous growth and that it is enough to assume that the capital goods that are indispensable in production can themselves be produced without the direct or indirect contribution of factors that cannot be accumulated, such as land. >Growth/Economic theories, >Endogenous growth, >Exogenous growth, >Marginalism, >Neoclassical economics, >New Growth Theory. Kurz I 266 Ricardo/Pasinetti: Following Ricardo (…), Pasinetti assumed that (i) workers consume all their wages in necessary goods (that is, agricultural commodities produced by using land), (ii) capitalists do not consume: they invest all their profits, (iii) landlords consume all their rents in terms of luxury goods (that is, industrial commodities produced without using land). Commodity: The model is a two-commodity model, and the two commodities are called "corn" and "gold. " These evocative names remind us that corn, the agricultural commodity, is intended as a necessary good and that the industrial commodity, gold, is intended as a luxury good. In this chapter, we reverse the consumption patterns: the industrial commodity is a necessary good that is consumed by workers, whereas the agricultural commodity is consumed by landlords and capitalists. Comsumption: Consumption by capitalists is a necessary ingredient of our manipulation of Pasinetti's model: if the agricultural commodity were consumed only by landlords, it would never be produced since there would be no demand for it. What is important is that this simple manipulation transforms Pasinetti's model into Rebelo's model. 1. Pasinetti, L.L., 1960. A mathematical formulation of the Ricardian system. Review of Economic Studies 27, 78-98. 2. Rebelo, S., 1991. Long run policy analysis and long run growth. Journal of Political Economy 99, 500-521. D’Alessandro, Simone and Salvadori, Neri. „Pasinetti versus Robelo. Two different models or just one?“ In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Pasinetti I Luigi L. Pasinetti Structural Change and Economic Growth: A Theoretical Essay on the Dynamics of the Wealth of Nations Cambridge 1983 Kurz I Heinz D. Kurz Neri Salvadori Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). Routledge. London 2015 |
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