Development with limited and unlimited supplies of capital

Article Abstract:

Lewis' 1954 model of economic development with an unlimited labor supply is contrasted with a development model characterized by unlimited capital. Representing the latter case, oil-exporting countries whose export earnings exceed their absorptive capacities, also suffer labor shortages. The analysis suggests that such countries will experience constant over- and under-shooting if labor reacts faster than wages do to wage differentials. Raising return on capital, instead of stabilizing such fluctuations, actually increases the likelihood of overshooting.

Economic aspects, Capital stock, Wage price policy, Wage-price policy

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Intersectoral capital mobility in a Kaldorian model of growth and development

Article Abstract:

The Kaldorian model, which analyzes the trade in commodities and movements of labor between the primary and secondary sector, also explains the effects of inter-sectoral capital mobility. The growth process may result in cycles and instability, if the relative profitability of sectors influences the flow of capital between agricultural and industrial sectors. The chances of instability rise if terms of trade changes guide capital flow and agricultural taxation may not be a viable way to support capital accumulation.

Capital movements

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Strategies for growth in a macroeconomic setting

Article Abstract:

Recently proposed new growth theory is based on the view of a long-term, endogeneous economic growth which is influenced by institutional and other factors. To further develop this field, a new model of economic growth is built based on M.F. Scott's learning-by-doing growth theory. To this end, the static production function in Scott's model is replaced with a fundamental growth equation that supports learning externalities, managerial discretion and uncertainty of returns to investment.

Macroeconomics

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