Pasinetti versus Rebelo: two different models or just one? *

Pasinetti (1960) reformulated the Ricardian theory of accumulation in terms of a two-sector model involving three social classes: workers, capitalists, and landlords. Rebelo (1991) ¹ introduced another model in order to show that increasing returns are not necessary to obtain endogenous growth and that it is enough to assume that the capital goods that are indispensable in production can themselves be produced without the direct or indirect contribution of factors that cannot be accumulated, such as land. In this chapter, we start from the model introduced by Pasinetti and show that small changes concerning the assumed pattern of consumption of the three mentioned social classes are able to obtain Rebelo’s model.