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A big difference between Classical and Keynesian models is that Classical models beg to be stable and Keynesian models do not. Classical models are equilibrium-oriented, Keynesian models are disequilibrium-oriented. Classical models tend to have a "guiding hand" built into the logic. Keynesian models do not. Hence, Harrod-Domar is a Keynesian model. It has an equilibrium, but the tendency is to be in disequilibrium and it has no "guiding hand'" to bring it back to equilibrium. But most of us, including Keynesian economists, have hard time living in a state of perpetual disequilibrium. Perpetual disequilibrium is a state of constant motion, chaos all around you. Hence, in basic classical economics, prices are the “guiding had” that adjust to keep the economy operating at full-employment equilibrium. In Keynesian economics, output and employment adjusts, so that the economy can move away from full-employment equilibrium and never return, without some exogenous push. To make Harrod-Domar palatable,: In Kaldor's model, the savings propensity adjusts to restore equilibrium on what is the macroeconomic stability side of the knife-edge, that is, it restores the balance between the actual and warranted rates of growth. In the Solow-Swan model, the capital-output ratio adjusts to restore equilibrium on what is the employment stability side of the knife-edge, that is, it restores the balance between the warranted and natural rates of growth. The reconciliation appears in the Adjustment Process module, http://cruel.org/econthought/essays/growth/neoclass/solowadjust.html, which you can read now and we will review on campus next week. This reconciliation is also a way to demonstrate the answer to Q#!, part d on the midterm exam. However, the Solow-Swan model, is a classical model, not a Keynesian model. The Keynesian "financial" factors omitted, prices adjust so that factor markets always clear, and the direction of causality between savings and investment is reversed. I = f(S). This is equivalent to re-imposing Say's Law: Supply creates its own demand.