I start with the definition of a developing economy a pedestrian start, yet a useful one. The initial position of a so-called developing economy is one of low-level stagnation. The warranted rate of growth, to use Harrod’s well-known ter..
A smooth transition of an economy from stagnation to progress is thus not inconceivable, particularly when foreign aid supplements the economy’s own efforts. But the conditions making for it are much too hypothetical; it is very much mor..
Harrod sets up an equation of growth for an open economy thus:1 GwCr = s — b where Gw is the warranted rate of growth, Cr is the required capital coefficient, s the fraction of income saved and b the foreign balance. The equation says that i..