Harrod, Keynes, and the "fundamental relation"

The value of C depends on the state of technol- ogy and the nature of the goods constituting the increment of output. It may be expected to vary as income grows and in different phases of the trade cycle; it may be somewhat dependent on the rate of interest. Interestingly enough, Keynes also pointed out to Harrod that his C was, in fact, a "war- ranted" and not a "planned" (ie, ex-ante) value, which is how Harrod originally saw it. Simply put, according to Keynes, Harrod's C was really the addition to what investment entrepreneurs "ought to plan to make" rather