It is a commonly accepted theory that Harrod's dynamics is not based on microeconomic theory. Namba (2000) objected to the theory and showed a new interpretation suggesting that Harrod's dynamics has a microeconomic foundation.
The purpose of this article is to clarify that the required capital coefficient is related to behaviors of dynamic optimization of firms.
There are two points presents in this article. First, the concept of required capital coefficient after Harrod (1939) has relation to the capital capital coefficient in the Trade Cycle, and the capital coefficient is connected to behaviors of dynamic optimization of firms. Second, the concept of required capital coefficient after Harrod (1939) is closely related to behaviors of dynamic optimization of firms, and is therefore related to the interest rate.