ABSTRACT
To measure bargaining power by incomes, health, education, housing or other social indices would be circular reasoning and thus scientifically illegitimate. It is not easy to devise independent measures of bargaining power and attach numbers to them. The set of theories, concerned with circular and cumulative causation, feedback effects, economic fluctuations and movements away from equilibrium, have perhaps had the most impact on economic thought of all the new theories introduced since World War II. Finally, in 1957, Nobel Laureate Gunnar Myrdal published his book on Economic Theory and Under-developed Regions, which applied the principal of circular and cumulative causation specifically to the problem of regional disparities. Evsey Domar's theory is cast in terms of the mechanics of a market economy at the macro-level, and states the conditions necessary, in an essentially tautological fashion, for steady growth of such a national economy, with full employment and without inflation.
