 Lange's 1938 model: dynamics and the "optimum propensity to consume"Michaël Assous and Roberto Lampa The European Journal of the History of Economic Thought, 2014, vol. 21, issue 5, 871-898 Abstract: Oskar Lange's 1938 article "The Rate of Interest and the Optimum Propensity to Consume" is usually associated with the original IS-LM approach of the late 1930s. However, Lange's article was not only an attempt to illuminate Keynes's main innovations but the first part of a wide project that included the development of a theory of economic evolution. This paper aims at showing that Lange's article can help in illuminating critical aspects of this project: in particular, Lange's idea that a synthesis between Kaldor's and Kalecki's theories and that of Schumpeter, might have been possible and that it represented (in intentions) a "modern" and consistent reconstruction of the Marxist theory of the business cycle. Section 2 clarifies Lange's early reflection on dynamics. Section 3 centres on Lange's 1938 static model and indicates the effects of a change of saving on investment. Section 4 suggests a dynamic reconstruction from which are addressed important arguments raised by Lange in a series of papers written between 1934 and 1942. Date: 2014 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:eujhet:v:21:y:2014:i:5:p:871-898 Ordering information: This journal article can be ordered from DOI: 10.1080/09672567.2014.934873 Access Statistics for this article The European Journal of the History of Economic Thought is currently edited by José Luís Cardoso More articles in The European Journal of the History of Economic Thought from Taylor & Francis Journals |
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