Harrodians and Kaleckians : A Suggested Reconciliation and Synthesis

The Kaleckian and Harrodian approaches to growth frequently arrive at antagonisticpositions with respect to key issues in heterodox macrodynamics, including the treatment of the rate of capacity utilization and the very nature of the long-run growthprocess. Nevertheless, this paper is devoted to exploring the possibilities for reconciling and even synthesizing these traditions. It does so by directly addressing three keyareas of dispute: the Keynesian stability condition; Harrodian instability; and the question as to whether long-run growth is best conceived in terms of a stable steady stateor `corridor instability'. It is shown that reconciliation and even synthesis is possible- the latter producing a `corridor within a corridor' conception of the growth processin which the economy switches between Kaleckian and Harrodian dynamics dependingon the extent to which the rate of capacity utilization departs from its normal rate