Question

Explain John Robinson's model with example of a country other than India.

Answer 1

Joan Robinson (1903–83), quintessentially Cambridge, remains an icon of modern economics, anathema to the mainstream orthodoxy, but with large followings in various heterodox and radical traditions. A rare woman in a man's profession, her achievements and fame far preceded formal recognition measured by the conventional milestones of professional status. Women in England could not vote on an equal basis until 1928; when she entered the Cambridge economics tripos in 1922, women had only just been allowed to read for University degrees; Joan would have had to wait outside the doors for another year to join the University Library, or to sit in University lectures (Marcuzzo et al., 1996: 1); and she would have been excluded from various elite academic clubs including, with a heavy twist of irony, membership of the Political Economy Club founded by Keynes (Turner, 1989: 13). She was not made a professor until 1965, and then occupied the chair vacated by her husband, Sir Austin Robinson; she went on to become the first female honorary fellow of King's College, Cambridge in 1970.According to Cambridge Keynesians prominently led by Joan Robinson, this progressive theoretical revolution mutated later, in the hands of her perennial American opponents, into what she termed ‘bastard Keynesianism’, involving a synthesis of a distorted version of Keynesianism with orthodox neoclassical micro‐economic theory. In parallel, it became increasingly apparent that the new tool kit could, and indeed would, be used as much for social democratic agendas with economic expansion favouring expenditure on social service provision and welfare enhancement, as for justifying the diversion of heavy state spending towards militarism and armaments. Taking the fight to the lion's den, Joan launched a fierce attack on the regressive trends in theory in her celebrated Richard T. Ely Lecture on ‘The Second Crisis of Economic Theory’ in 1971 to the American Economic Association under the invitation of its President, J.K. Galbraith, a kindred spirit (Robinson, 1972). Harrod and Domar extended the Keynesian analysis of income and employment to the long-run setting and therefore considered both the income and capacity effects of investment. Harrod and Domar models of economic growth explain at what rate investment should increase so that steady growth is possible in an advanced capitalist economy. In the growth models of Harrod and Domar, the rate of capital accumulation plays a crucial role in the determination of economic growth.
Joan Robinson has further refined the model of capital accumulation in a private enterprise economy. She relates investment with the rate of profit which in turn depends upon the distribution of income between wages and profits on the one hand and labour productivity and capital intensity on the other.On the other hand, the equilibrium condition shows that the rate of profit itself governs the rate of accumulation. Anything that determines the rate of profit would also determine the rate of growth of capital. Thus in Joan Robinson’s model of growth the urge to accumulate capital on the part of entrepreneurs determines the rate of economic growth. And the urge or desire of the entrepreneurs to accumulate capital depends on the expected rate of profit.
Accumulation and profit are, therefore, linked with each other in a circular way. “If they have no profit, the entrepreneurs cannot accumulate and if they do not accumulate they have no profit”. Thus, the basic mechanism underlying Mrs. Robinson’s growth model is the desire of the firms to accumulate. And the urge to accumulate is dependent on the expected rate of profit.Abstract The economic literature ever since the dawn of modern economics has been much preoccupied with the issue of economic growth. Economic growth has also been understood to establish the conditions for economic development. The better-known models of economic growth such as the Lewis, Rostow, Harrod-Domar, Solow, and Romer growth models are discussed. The discussions apply contextually to the problematic issue of growth and development in Africa. It is argued that a very necessary condition for growth and transformational development in Africa is heavy investment in human capital. It is pointed out that countries that invest much human capital to produce highly educated populaces usually reap the benefits of such in terms of high per capita GDPs, regardless of the levels of their technological and industrial output. Countries like New Zealand, Iceland, and Denmark offer evidence of this. Models of African development such as the Lagos Plan of Action in terms of the whole continent are discussed within the context of existing impediments to such progress.