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Making of Harrod's Dynamics
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This book inquires into the origin and early development of Roy Harrod's notion of economic dynamics. It examines how Harrod gathered the analytical, methodological and epistemic components of his theory, and how these are logically connected. It shows that the organizing concept is the instability principle, stating that in order to provide an endogenous explanation of movement a destabilizing factor must be introduced at the outset. This makes it a premise rather than a result of Harrod's trade cycle theory. The relationship of Harrod's dynamics with the 'orthodox theory' and with the alternative approaches to dynamics - in particular the 'time-lag theories of the cycle' - is also examined. The point of contact with orthodoxy was the method of analysis, which Harrod generalized from the partial equilibrium approach. The point of detachment was the instability principle, which Harrod saw as a rejection of the traditional assumption of the stability of equilibrium.
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