ABSTRACT
It may be hard to imagine that the origins of macroeconomics, as we know it today, came from a German revolutionary, exiled to England and ignored by the economic establishment. In 1878, working for the last time on his great writing project, Capital, Karl Marx developed the reproduction schema: his model of how total capital is produced and reproduced. This is thought to be the first two-sector economic model ever constructed, with two great departments producing means of production and means of consumption. Not only did this model capture the division between consumption and investment that later became the centrepiece of Keynes’s General Theory (1936), it went beyond the short-term focus of Keynes to explore the structure of economic growth. Marx has thus been described as the forerunner of macroeconomic growth theory.1
