In The Trade Cycle, Roy Harrod [1936a] propounded the Law of Diminishing Elasticity of Demand. The present paper tries … micro and macro foundations of the Law of Diminishing Elasticity of Demand and how, according to Harrod, it explains one of … the main mechanisms that stabilize the economy during the trade cycle. In addition, we show how the Law of Diminishing …

In The Trade Cycle, Roy Harrod [1936a] propounded the Law of Diminishing Elasticity of Demand. The present paper tries … foundations of the Law of Diminishing Elasticity of Demand and argue that it explains one of the main mechanisms that stabilize … the economy during the trade cycle. In addition, we highlight how the Law of Diminishing Elasticity of Demand allowed …