ABSTRACT
Oskar Lange’s 1938 work “The Rate of Interest and the Optimum Propensity to Consume” is widely recognised as one of the earliest mathematical models of Keynes’s General Theory. In light of its analytical content, it has usually been associated with the original IS-LM approach of Roy Harrod, James Meade, and John Hicks (Young 1987, Darity and Young 1995). However, Lange’s article was not a reaction to Keynes’s works but the first part of an ambitious project that included the development of a theory of economic evolution1 (see Lampa 2014). Indeed, Lange manifested his interest in dynamics very early in his
career. For instance, both his doctoral dissertation and his thesis presented for the “docent” degree that is, assistant professor were devoted to the analysis of the business cycle in Poland. In several occasions, he also emphasised the close connection between his view and Karl Marx’s ideas. Furthermore, he attached great importance also to the works of Joseph Schumpeter and Michal Kalecki2: from 1934 to 1936, he became tightly
connected to the former at Harvard, whereas his interest in Kalecki’s business cycle seems to have grown more important after the publication of the General Theory.3
