Advantages And Disadvantages Of Growth Model

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The key weakness of these models lies in their simplifying assumptions. A single production function is simply assumed for all countries (Adelman 2000). Every economy is assumed to have the same necessary conditions and would pass through the same phasing, stage by stage. But that economic growth path, which historically had been followed by the more developed countries, is not the only one pathway. The development process is actually highly nonlinear.
Countries may pursue distinct development paths. Economies may miss stages, or become locked in one particular stage, or even regress depending on many other complementary factors such as managerial capacities, and the availability of skilled labour for a wide range of development projects (Todaro and Smith, 2009).
Assumptions of the Linear Stages of Growth Models
i.To increasing rate of investments, there is need to induce per-capita growth. ii.Nigeria needs capital to
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The excess of modern sector profits over wages and hence investments in the modern sector continued to expand and generate further economic growth on the assumption that all profits would be reinvested. Both labour transfer and modern sector employment growth were in turn brought about by output expansion in that sector. This process of modern sector self-sustaining growth and employment expansion facilitated the structural transformation from a traditional subsistence economy to a more modern developed economy to take place (Asodike, 2008).
Like the Harrod–Domar model, the Lewis model considered savings and investments to be the driving forces of economic development but in the context of the less developed countries. However, several Lewis’ assumptions are not valid such as those relating to rural surplus labour, and the proportional rate of expansion in capital accumulation in the modern sector (Asodike,
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