In this article we will discuss about the sources of foreign savings. Since most LDCs have low per capita incomes, they are unable to save enough to be able to investment in capital stock such as plant, equipment, machines, structures, etc. So, they are constrained to rely on the savings of other countries to bridge the domestic saving-investment gap and [...]
The following points highlight the five main causes of low per capita output. The causes are: 1. Low Rates of Saving and Capital Accumulation 2. Shortage of Skilled and Educated Workers 3. Lagging Technological Know-How 4. High Population Growth and Unemployment 5. Political Instability and Government Policies that Discourage Production. Cause # 1. Low Rates of Saving and Capital Accumulation: [...]
In this article we will discuss about the major problems of capital formation in labour suplus economies. Physical capital formation plays a very important role in the process of economic development. In fact, the level of output or GNP and its composition depend to a great extent on the amount of capital available in the country. Capital here refers to [...]