Growth Models Flashcards
Linear Stages of Growth Model
successive stages which countries must pass, same for countries which developed hundreds of years ago as now
Harrod-Domar Growth Model
functional relationship growth rate of gross domestic product depends directly on national net savings and inversely on national capital-output ratio
Rostow’s Stages of Economic Growth
sequential stages of achieving development
- traditional society
- pre-conditions for take off
- take off
- drive to maturity
- age of high mass consumption
Theories and Patterns of Structural Change
- transforming domestic economic structures from a heavy emphasis on traditional subsistence to a more modern urbanized/industrially diverse manufacturing and service economy
- hypothesis that under development is due to under-utilization of resources arising from structural or institutional factors
- data driven
- steady accumulation of physical capital and human capital
- an optimist theory
Lewis Theory of Economic Development
switching from ag to modern sector, take the surplus labor working in ag and move it to the new industry
Structural Change and Patterns of Development
similar to Lewish model in that there’s a sequence of events, but different in that saving and investment are only necessary, but not sufficient for growth.
International-Dependence Revolution
developing countries are hurt by political, economic and institutional rigidities. It’s not the developing country’s fault
Neoclassical Dependence Model
attributes existence and continuance of underdevelopment of unequal historical rich country poor country relationships. core v. periphery world view
False Paradigm Model
less radical than neocolonial dependence model, attributes underdevelopment to bad advice by wealthy countries.
Dualistic-Development Thesis
dualism: existance and persistence of substantial and even increasing divergences between rich and poor
Free Market Approach
problems come from too much gov’t intervention, let the free market and invisible hand do their thing
Traditional Neoclassical Growth Theory
economic liberalization draws additional domestic and foreign investment and increases rate of capital accumulation
Solow Neoclassical Growth
diminishing returns to each factor of production and constant returns to scale, exogenous technological changes boost economic growth otherwise stuck in steady state
Big Push Model
harder to start growth than to sustain it, coordination failure means that supply and demand have multiple equilibria and it takes gov’t intervention to get to the good equilibria. Assumption agents are homogenous. S shaped line is the reaction function, the y axis is the reality, the x axis is the expectation of the individual agent. Based on pencuiary externalities, has to do with costs and revenues.
O-Ring Model
production function exhibit strong complementarities among inputs which has broader implications. based on space mission Challenge, idea that every piece of the puzzle must work perfectly for take off.
