Economic Growth And Development Of The Asian Nics, India, China

3035 WordsDec 22, 201413 Pages
Introduction: The world today (or at least most of the “developing” part) is being lead by chief institutions like the World Bank, International Monetary Fund and the United Nations and its subsidiaries, with the one central point of discussion – economic growth and development of the “poor” countries. The past few decades have witnessed major ups and downs in the economies. While some countries have experienced shrinking incomes (Zambian per capita income figures in early 1990’s as compared to 1960s (Easterly, 2002, p.42)), some have experienced a substantial increase (East Asian NICs, India, China, etc). The debates on why some countries are poor while some are significantly more prosperous and why some countries grow faster than the others have long puzzled economists while the answer to it is still quite inconclusive. Evsey Domar in his 1946 paper himself referred to ‘the rate of growth’ as ‘a concept which has been little used in economic theory’. However, much effort has been made since then to explain the process of economic growth and the determinants for it, based on which many growth theories have emerged in which Domar himself had a major role to play. While many growth theories that have been developed since, this essay will focus on a few of the classical models, the Swan-Solow neoclassical model and the “new” growth theories, discussing their relevance with present developing economies. Classical Growth Theories Classical economist Adam Smith emphasized on
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