ABSTRACT
This chapter opens the model out into a dynamic model of economic growth, though to a limited extent only, by assuming that the stock of capital available to the economy is determined by the savings behaviour of the community. The author shall not make the model fully dynamic, however, because the author shall follow the tradition of at least the simpler of contemporary growth models by assuming, first, that the rate of population growth is exogenously given, and second, that the rate of technical progress is not only exogenously given but takes a particular form – convenient for theory but not necessarily realistic – namely the form of purely labour-augmenting or 'Harrod-neutral' technical progress. The Ricardian model is, of course, the quintessential growth model, and the basis of classical and neo-classical theorizing about growth, even though it is formulated in comparative statics terms.
