Robert Dixon Trevor Swan on Equilibrium Growth with Technical Progress

The recent publication of Swan’s “Economic Growtheconomic growth” paper (Swan 2002Swan, T.W., 2002), which preceded his famous 1956 Economic Record article, and the commentary by Pitchford that accompanies it (PitchfordPitchford, John 2002) provides an opportunity to draw attention to an important difference between Swan’s exposition of neoclassical growth and that of Solow’s published in the same year. Peter Swan’s introduction: In Trevor Swan’s early version of his growth model, first published as Swan (2002) and included above, he warns that Solow’s (1956) article “is in several respects misleading”. While we will never know exactly what he meant by this, the most likely explanation was Solow’s focus on the capital–labour ratio rather than on Swan’s output–capital ratio. This meant that Solow’s treatment of technical progress contained a slip. Robert Dixon (2003) provides an excellent account of why this fundamental difference in focus led Solow into error. Dixon’s important contribution is included here. In assessing Dixon’s contribution, it must be recalled that with the Cobb–Douglas production function assumed by both Swan and Solow that both Harrod-neutral labour-augmenting and Hick’s-neutral technical change amount to the same thing. But for more general production functions only labour-augmenting technical change is compatible with the steady state.