Essay On Balanced Vs Unbalanced Growth

A further limiting factor on economic development in developing countries is the savings gap. This factor can be explained by the Harrod-Domar model which illustrates the problem of how countries with a low GDP per head will experience low savings ratios (savings as a proportion of GDP). This is because their marginal propensity to consume (the proportion of any increase in income which is spent) will be high. Low savings means that it will be difficult to finance investment and, with low levels of investment, capital accumulation will be limited. This will then translate into low output and GDP.

Economic Development: Growth is associated with structural, social change and change in the important institutions of the economy.

If market demand increases, price is bid up and economic profits are made in the short run. These economic profits attract new firms to the market, and existing firms may expand. But to produce their output, firms need resources. If the total demand for resources increases significantly, resource prices are bid up for each firm in the industry. This causes an upward shift of the average total cost curve, consistent with a higher equilibrium price at the point of zero profit.

3.How these strategies are related the performance of these companies over time? Why? What is going on in terms of industry competition and markets that makes one strategy outperform the other at any point in time?

Review of: Olson, Matthew S., Van Bever, Derek ,Verry, Seth. 2008. When Growth Stalls. Harvard Business Review, 51-62.

- The industry grow is staggered (less than 1%). This will result in a market share competition that will benefit the companies who have the means to survive, e.g. the means to lower their costs.

1) With reference to theories of growth and development, explain the contrasting growth experience of China and Sub Saharan Africa post 1980.

Government policy and norms are very important to insure equality in any society. The distributions of resources are not equal among individuals of society than how the equality in society can be established. Governmental intervention is required in this issue to robust the sources of survival and strengthen the income generation activities. One of the major solutions of this issue can be financial inclusion. According to Bigsten & Levin (2000) it is not necessary that the economic growth of any country will surly benefit the marginalized people in society. It is determined by the government policy and norms that the benefit will reach to the lowest segment of the society. In this research paper we find that GDP growth in urban areas and growth

The impact of savings rate in an economic has become a very conflicting issue in research and among economist all over the world. This may be due to the importance of savings generally to the economic growth and development of any nation. However, the structure of every economy cannot be generalised by a particular economics’ variation because various countries have different social security and pension schemes, and different tax systems, all of which have an effect on disposable income. In addition, the age of a country’s population, the availability and ease of credit, the overall wealth, and cultural and social factors within a country all affect savings rates within a particular country. Therefore,

Next, the economics will become better off is because of the stability of the price. The price for the product in this market is stable. This is due to there

The second approach is Prisoner's Dilemma, in which an actor makes a rational choice based on cost & benefit analysis. This approach implies two strategies: “cooperate” or “defect”. “Cooperate” strategy would mean that the participant cooperates and shares the common-pool resource equally, whereas “defect” strategy , a strategy that more likely would be chosen due to lack of communication between the parties, implies that the participant uses/extracts as much resource as he can sell for profit (p.18)

Taking into consideration the trickle-down theory of economics by Lewis, if the growth in economy is not sufficient to satisfy the needs and wants of the upper sections, nothing or very little shall trickle down to the lower sections in the hierarchy of society. Thus, the gap between the rich and poor widens and though economic growth has impacted a certain section of society, this cannot be considered development. Another example is an increase in the defence output of a nation, which accounts for an increased GDP but does not in any way contribute to economic development. Economic growth is not enough in itself to measure economic development as even if there has been a leap in the income of people in a particular nation,

Economic growth refers to the rate of increase in the total production of goods and services within an economy. Economic growth increases the productivity capacity of an economy, thereby allowing more wants to be satisfied. A growing economy increases employment opportunities, stimulates business enterprise and innovation. A sustained economic growth is fundamental to any nation wishing to raise its standard of living and provide a greater well being for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced over a year. It is the total value of production within the economy. The total value of production is the total value of the final goods or services less the cost of

Moving forward, the private sector must play a bigger role in verifying economic growth. Poor infrastructure and insufficient access to electricity are a few of the major limitations to private investment. Investment depends heavily on foreign aid, with secure inflows critical to keep the current investment rate high at about 25% of GDP. Decreasing the country’s dependency on foreign aid through domestic resource mobilization and promoting domestic savings is seen as essential.

He pointed out that different economic levels have their own requirements and they may not follow the same process of industrialization. Moreover, he raised the most influential theory related to late industrialization that the economically backward states may have rapider growth rate as they are late comers, and the national development process relied on the degree of economic backwardness. That is to say the more backward a country, the faster it will advance (ibid).