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| Author: | Nell, E. J. |
| Title: | Transformational growth and the long-period method |
| Journal: | Review of Political Economy
1996 : OCT, VOL. 8:4, p. 379-401 |
| Index terms: | PRICE LEVEL CAPITALISM FLEXIBILITY |
| Language: | eng |
| Abstract: | The long-period method rests on gravitation which, in turn, implies that the real price-quantity system adjusts in a stable manner. The process of gravitation rests on prices that are flexible in both directions, and on the willingness of investors to shift capital in response to changes in market prices. Neither are empirically present or plausible in modern conditions, though both may have characterised capitalism in its earlier stages, based on craft technology. But later capitalism - operating mass production - exhibits in flexible relative prices coupled with volatile quantities. For the Classical equations to serve as the basis for the analysis of cycles and growth in modern conditions an interpretation must be found which does not beg the question of stability. Such an approach is sketched. |
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