The Theory Of Economic Growth

6096 WordsJun 10, 201525 Pages
CHAPTER 2: LITERATURE REVIEW Abstract The theory of economic growth sparked a revolution that has touched most societies across the globe. (Need to finish the abstract) 2.0 Introduction The aim of this original piece of research is to contribute to the overall understanding of how financial development effects different sources of economic growth alongside the effectiveness of fiscal policy. In highlighting this research direction, a strong literature review is needed to indicate if any gaps exist. As the topic is well researched and broad, it is important to streamline this research into a specific yet important fields to identify these gaps. This literature review will therefore investigate into the following key areas: the history of economic growth, modern growth theories: exogenous and endogenous, financial development growth and the effectiveness of fiscal policy towards reducing economic uncertainty that ultimately affects growth. 2.1 The History of Economic Growth A considerable amount of theoretical and empirical literature emerged during the nineteenth-century surrounding the theory of economic growth. If one is to complete detailed research into how financial development affects different sources of economic growth alongside the effectiveness of fiscal policy, a meaningful and well-structured literature review must be presented. Due to the complicated nature of such a theory, a historical frame work will be adopted to dilute its complicated nature. The
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