Sir Roy F. Harrod was born in Norfolk, England. He taught at Christ Church College until his retirement in 1967. The chairman of the Nobel prize Committee, Lindback, wrote that Harrod would have won the Nobel Prize had he lived longer. He worked clo sely with John Maynard Keynes.

Harrod is most known for his work on economic growth (Harrod-Domar Growth Theory). According to this theory, every economy must save a certain proportion of its national income in order to replace capital goods. However, for an economy to experience growth, net additions and not merely replacement of capital are necessary. Before I outline the mathematical aspects of his model, it is necessary to be aware of the assumptions that underlie this theory:

• Their exists a direct economic relationship between the size of the total capital stock (K), and total GNP,(Y). This will give us a capital/output ratio for the equations(k).
• The national savings ratio (s), is a fixed proportion of national output.
• Total new investment (I) is determined by the level of total savings(S). (In the equations, investment is defined as the change in capital stock)
• Total savings equals total investments.

Harrod also introduced the concepts of natural growth rate (rate required to maintain full employment), warranted growth rate (rate at which all saving is absorbed into investment), and actual growth rate (which is self-explanatory). According to Harrod, two problems could arise concerning growth rates. The first being that the natural and actual growth rates may not be equal. The reason for this is because natural growth is determined by the labor force while actual growth is determ ined by the rate of saving. What this means is that there is no inherent tendency for an econmy to reach full employment. The second problem was unstable growth resulting from unequal actual and anticipated demand . This became known as "Harrod's knife edge".

Works by Sir Roy F. Harrod:

• The Life of John Maynard Keynes
  
• The Trade Cycle: An Essay
  
• Towards A Dynamic Economics: Some Recent Developments of Economic Theory and Their Application to Policy
  
• An Essay in Dynamic Theory, Economic Journal