We shall explain below Joan Robinson's model of capital accumulation and growth which is suited to the labour-surplus conditions of less developed countries. Harrod and Domar extended the Keynesian analysis of income and employment to the long-run setting and therefore considered both the income and capacity effects of investment. Harrod and Domar models of economic growth explain at what rate [...]
In this article we will discuss about:- 1. Introduction to Harrod-Domar Growth Model 2. Domar’s Growth Model 3. Harrod’s Growth Model 4. Relevance of Harrod-Domar Growth Model for Developing Countries. Introduction to Harrod-Domar Growth Model: Keynes in his General Theory was concerned with the determination of income and employment in the short run. He explained that since in the short-run [...]
Robert Solow and Denison have attempted to study the relative importance of the various sources of economic growth by using the concept of production function. The rate of economic growth in an economy and differences in income levels of different countries and also their growth performance during a period can be explained in terms of the increase in these sources [...]