ECONOMIC GROWTH AT A MAXIMAL RATE.

The article discusses problems associated with economic growth at maximal rate. The main purpose of the present article is expository. Drawing where needed on the studies cited, the authors utilize a diagrammatic device that makes it possible to exhibit, in terms of a two-commodity world, the essentials of the model by economist John von Neumann and its maximal growth properties. It is reported that in 1936 von Neumann presented orally, for subsequent publication in an Austrian mathematical periodical little known to economists, a paper that has greatly influenced economic theory up to the present time, and of which all the ramifications have perhaps not yet become fully apparent. Paradoxically, von Neumann's paper shows that for a piece of work to spark several new developments in economic theory, it is not necessary that it have any particular claim to realism in its portrayal of economic life. Subsequent developments have fully vindicated the intuitions that led von Neumann to make these drastic and arbitrary-looking simplifications.