Economic Growth and Long Cycles: A Classical Political Economy Approach

Contemporary capitalism is characterized by periods of vigorous economic growth and periods of slow or even negative growth. This book draws on the classical political economy approach to consider both economic cycles and economic growth and draw conclusions about the inherent instability of the modern economy. The book shows that the work of the old classical economists (Smith and Ricardo) and Marx is theoretically sound and capable of providing answers to both growth and cycles. It also demonstrates the potential and natural integration of growth and cycles in a single model. The microeconomic foundation of this model is the labor theory of value, which continues with the General Law of Capital Accumulation, the Law of the Falling Rate of Profit, and the movement of the Industrial Reserve Army of Labour. Finally, a dynamic model of growth-cum-cycles is constructed consisting of the evolution and interaction of five key variables, namely, the rate of profit, the propensity to invest in fixed capital, technological change, the reserve army of labour, and the rate of capital devaluation. The analysis demonstrates that economic growth and cycles are not disconnected from each other, as they have been treated in the literature, but rather interdependent aspects of the same evolutionary process of a capitalist economy. This book will interest readers in the history of economic thought, economic growth and development, macroeconomics, and political economy.

Nikolaos Chatzarakis is an Assistant Professor of Political Economy in the New School for Social Research, in New York. He holds a BSc and MSc in Physics, and an M.Sc. and Ph.D. in Political Economy from the Aristotle University of Thessaloniki and currently working on a PhD in Mathematical Physics in Trinity College, Dublin.

Persefoni Tsaliki is a Professor of Economics at the Aristotle University of Thessaloniki. Her publications include many articles in refereed journals, and she is the co-author (with Tsoulfidis) of Classical Political Economics and Modern Capitalism: Theories of Value, Competition, Trade, and Long Cycles. She is also a co-author (with L. Tsoulfidis) of Essays in Political Economy (2012) and Issues in Political Economy (1999), both published in Greek. She is the Director of the ’’Political Economy Research Group’’ at the School of Economics, Aristotle University of Thessaloniki.

Lefteris Tsoulfidis is a Professor in the Department of Economics at the University of Macedonia in Thessaloniki. His publications include many articles in refereed journals. His recent books include: Capital Theory and Political Economy: Prices, Income Distribution and Stability (2022). He has also published: Competing Schools of Economic Thought (2010). He is the co-author (with P. Tsaliki) of Classical Political Economics and Modern Capitalism: Theories of Value, Competition, Trade, and Long Cycles (2019); (with T. Mariolis) Modern Classical Economics and Reality (2016). He is co-editor of the Bulletin of Political Economy since 2007.