Economic Growth and Long Cycles: A Classical Political Economy Approach (Routledge Frontiers of Political Economy)

Contemporary capitalism is characterized by periods of vigorous economic growth and periods of slow or even negative growth.This book draws on the classical political economy approach to consider both economic cycles and economic growth and draw conclusions about the inherent instability of the modern economy.The book shows that the work of the old classical economists (Smith and Ricardo) and Marx is theoretically sound and capable of providing answers to both growth and cycles.It also demonstrates the potential and natural integration of growth and cycles in a single model.The microeconomic foundation of this model is the labor theory of value, which continues with the General Law of Capital Accumulation, the Law of the Falling Rate of Profit, and the movement of the Industrial Reserve Army of Labour.Finally, a dynamic model of growth-cum-cycles is constructed consisting of the evolution and interaction of five key variables, namely, the rate of profit, the propensity to invest in fix