Lange’s 1938 model: dynamics and the “Optimum propensity to consume”

Michaël Assous and Roberto Lampa

No 2014-2, Center for the History of Political Economy Working Paper Series from Center for the History of Political Economy

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 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 1 clarifies Lange’s early reflection on dynamics. Section 2 centers on Lange’s 1938 static model and indicates the effects of a change of saving on investment. Section 3 suggests a dynamic reconstruction from which are addressed important arguments raised by Lange in a series of papers written between 1934 and 1942.

Keywords: Lange; Kalecki; Marxian theory of the business cycle; marginal propensity to save; non-linearity (search for similar items in EconPapers)
Pages: 35
Date: 2014
New Economics Papers: this item is included in nep-ger, nep-his, nep-hme, nep-hpe and nep-pke
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hope.econ.duke.edu/node/954 main text
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://hope.econ.duke.edu/node/954 [301 Moved Permanently]--> https://hope.econ.duke.edu/node/954)

Related works:
Working Paper: Lange's 1938 Model: Dynamics and the "Optimum propensity to consume" (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hec:heccee:2014-2

Access Statistics for this paper

More papers in Center for the History of Political Economy Working Paper Series from Center for the History of Political Economy Center for the History of Political Economy Box 90097 Durham, NC 27708-0097.
Bibliographic data for series maintained by Center for the History of Political Economy Webmaster (pauldude@duke.edu).