The Classical Growth Model

This chapter presents a simplified model of growth in the Classical tradition of Adam Smith, David Ricardo, and Karl Marxl. Two features that distinguish this model from similar efforts in the neoclassical tradition (pre-

218 CHAPTER 15. THE CLASSICAL GROWTH MODEL

sented in the next chapter) are its attention to the class structure of saving, and its recognition that capital, not labor, may be the chief constraint on long-run growth. Partly because of its austere character, growth theory provides us an excellent opportunity to understand the underlying differences between two important schools of thought or paradigms in economic theory, the Classical and neoclassical traditions.