Analytical Political Economy

5 HETERODOX THEORIES OF ECONOMIC GROWTH AND INCOME DISTRIBUTION: A PARTIAL SURVEY

Amitava Krishna Dutt

University of Notre Dame

and FLACSO-Ecuador

1. Introduction

Theories of economic growth are often seen to originate in Harrod (1939) and Domar (1946), but they emerged much earlier, at least as far back as the classical economists, Smith, Malthus, and Ricardo, followed by Marx. The focus of analysis then shifted from economic expansion as a whole to resource allocation and the study of individuals and their interactions in markets. The earlier tradition was revived by Harrod and Domar after the development of Keynes's theory of effective demand. While several early theories of economic growth after the 1940s, most notably those of Kahn (1959) and Robinson (1956, 1962), continued in the Keynesian tradition, and economists such as Kaldor (1955–56, 1957) and Pasinetti (1962), drew on classical-Marxian as well as Keynesian approaches, growth theory from the mid-1950s became increasingly dominated by neoclassical (NC) theories that combined the theory of resource allocation with the theory of the growing economy as a whole.¹ Initially, pioneered by Solow (1956) and Swan (1956), and further developed – drawing on earlier work of Ramsey (1928) – especially by taking into account optimization, NC growth theory became mainstream growth theory. After a lull in interest in growth, “new” or “endogenous” growth theory emerged in the late 1980s, especially with the contributions of Romer ...