New Publication in Journal of Evolutionary Economics - Harrodian instability and induced technical change
New Publication in Journal of Evolutionary Economics - Harrodian instability and induced technical change (with Luca Zamparelli)
The paper “Harrodian instability and induced technical change” (coauthored with Luca Zamparelli) has been published in Journal of Evolutionary Economics.
You can find the article at the journal page: https://doi.org/10.1007/s00191-026-00961-w.
Here is the abstract:
This paper presents a demand-led growth model augmented with induced technical change to address the two Harrod’s problems in growth theory. Building on recent developments in the supermultiplier literature, we investigate how both Harrodian instability problems can be resolved through two complementary mechanisms: (1) autonomous, non-capacity-creating demand components growing at an exogenous rate, and (2) endogenous technical change responsive to income distribution. On the one hand, demand shocks are absorbed via adjustments in the investment share, allowing capital accumulation to align with the exogenously determined growth rate of autonomous expenditures. On the other hand, labor market imbalances trigger productivity adjustments that reconcile natural and warranted growth by altering the wage share. This dual adjustment mechanism allows the system to sustain normal capacity utilization and stable employment rates, while preserving demand-led growth outcomes.
