Economics and Management Notes > Oxford University Economics and Management Notes > Development Economics-1 Notes

Economic Growth Notes

This is a sample of our (approximately) 19 page long Economic Growth notes, which we sell as part of the Development Economics-1 Notes collection, a 1st Class package written at Oxford University in 2011 that contains (approximately) 365 pages of notes across 19 different documents.

Learn more about our Development Economics-1 Notes

The original file is a 'Word (Docx)' whilst this sample is a 'PDF' representation of said file. This means that the formatting here may have errors. The original document you'll receive on purchase should have more polished formatting.

Economic Growth Revision

The following is a plain text extract of the PDF sample above, taken from our Development Economics-1 Notes. This text version has had its formatting removed so pay attention to its contents alone rather than its presentation. The version you download will have its original formatting intact and so will be much prettier to look at.



o o o o

o o

Harrod Domar model Useful for development planning in 1970s Growth in US - endogenous growth model Models do not show booms/accelerations/stagnations very well Volatility - not explained by Solow - BUT Solow explains the trend (just not the fluctuations in the trend)
 Transformation needs to be incorporated explicitly
 Solow model does not explain concentrated growth
 Expectation driven versus history driven

E.g. expectation driven - expect to sell more shoes therefore build a factory (perceived returns to investment) OR expect to sell only a few shoes so buy from a supplier

Multiple equilibria

Shift from 'good' equilibrium to 'bad' equilibrium Industrialisation - huge fixed costs, average cost will fall Can this model be tested?
 Rich nations - constant path
 Poor nations - stuck being poor - stagnant
 Transition nations - some have taken off, some converge to the poor (middle income thinning out) Away from steady state → ratio can change temporarily due to adjustment

Constant returns to scale can only be sustained by perfect competition. In order to have imperfect competition there must be ↑returns to scale. 2Y = F (2K, 2L, A) 2Y •

Number of researchers ↑
Explosive growth is not the same as exponential growth => growth rate is constant Explosive growth is a path where growth rate itself is increasing Solutions to knife edge: o Essay question not true of these 2 models:
 Semi-endogenous


****************************End Of Sample*****************************

Buy the full version of these notes or essay plans and more in our Development Economics-1 Notes.