748. Harrod to D. H. Robertson , 22 January 1938 [a]
[Replies to 717 and 746 ]
Christ Church, Oxford #
22 January 1938
My dear Dennis
I am so sorry about the British Ass[ociation], but I wont attempt to over-persuade you. But, even if you do not read a paper, I do hope that you may be in Cambridge at the time. That would involve no duties and be so much nicer for us.
I am so far un-repentant about the rate of interest in a stationary state. Current new investment involves an increase in the means of production but this contradicts the static assumptions. If you are prepared to waive this and allow growth of capital in an otherwise stationary state, then the laws of supply & demand give you not a rate of interest but a rate of fall in the rate of interest with nothing said as to the absolute level of the rate of interest. The ordinary analysis does not provide any account of what determines the absolute level.
In her last book Joan Robinson says that the rate of interest must always be falling.  That is only true as a general statement, if you are dealing with a static state. But how foolish to assume that in a book on unemployment & the trade cycle.
It is very kind of you to offer something for the house. May we let you know a little later when we are sufficiently settled (no. 6 Beaumont St.) to be able to look round & see what we have got and what we have not got. Do come & visit us soon.
- a. ALS, two pages on one leaf, in DHR C3/3; photocopy in HP (NC).
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