Preview

Assignment on Harrod Domar Growth Model

Satisfactory Essays
Open Document
Open Document
287 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Assignment on Harrod Domar Growth Model
Describe and explain the simple Harrod-Domar Growth Model and its relevance to India’s Five Year Plans.

The Harrod -Domar growth model goes on to explain the relationship between economic growth, which is the level of savings and capital in terms of productivity required. This is widely used in developing countries. This model was developed independently by Roy Harrod and Evsey Domar in 1940. This model is based on real life happenings which can be observed like not all people that live do work. Therefore there is unemployment and goes ahead to explain that capital(which is money) is the binding constraint on production and growth.

The growth An aggregate production function is the base for any economic growth model. It’s function can take up in different forms, where we can calculate production and output. Factors that can have an impact on the outcome are based on (agriculture, heavy industry,light labour,intensive manufacturing

Knowing the difference between economic growth and development will only give rise to national income.

Whts the growth model – explain each formauls and wht it means
How did help in Indians development
How the 5 yr plan works y it was introduced spk abt 1 o0 2 of the 11 plans available.

The relevance that the growth model has to India’s five year plan is that India’s GDP grew at a rate of 4% per year during the first two Five year plans which was from 1951-56 and 1956-61. This rate of growth is reported to be 2 to 3 times higher than the rate recorded under the British administration. During this period it is where it opened doors to licensing of private investments in certain sectors. Then prime Minister

You May Also Find These Documents Helpful

  • Good Essays

    Outline major factors that lead to growth (include definitions, description or example) and for each, list government policies that may encourage each one.…

    • 544 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Economic growth refers to an increase in the real output of goods and services in the country. Its growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports. Its measurement is quantitative through the measure of GDP. Economic development implies changes in income, savings and investment along with progressive changes in socio-economic structure of country (institutional and technological changes). It relates to growth of human capital indexes, a decrease in inequality figures, and structural changes that improve the general population's quality of life. Its measurement is qualitative and is measured through HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc.…

    • 877 Words
    • 4 Pages
    Good Essays
  • Good Essays

    This essay will discuss the following four limitation of growth; lack of infrastructure, human capital inadequacies, primary productive dependence and corruption.…

    • 985 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Growth Rates

    • 1018 Words
    • 4 Pages

    There are three categories of factors that contribute to a low or high growth rates. These categories are the demand factor, the efficiency factor, and supply factors. Government spending or exports can lead to a higher to aggregate demand and higher economic growth. “Economic growth requires increases in total spending to realize the output gain made available by increased production capacity” (McConnell, 2012, p. 513). One way to accomplish this is by lowering interest rates. Lower interest rates make borrowing cheaper. This encourages consumers to spend more money. Efficiency is attained when resources are used “…in the least costly way to produce the specific mix of goods and services that maximizes people’s well-being” (McConnell, 2012, p. 513). For example, when human resources are not being used to their full potential unemployment will increase. As unemployment increases, total spending will decrease. This will lower growth rates. Supply factors such as increases in natural resources, increases in human resources, increases in the supply of capital goods, and improvements in technology create a higher economic growth rate (McConnell, 2012, p. 512).…

    • 1018 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Discussion

    • 473 Words
    • 2 Pages

    There are six determinants of growth grouped into supply, demand and efficiency factors. Supply factors are increases in the quantity and quality of both natural and human resources, increases in supply of capital goods and improvements in technology. Those supply factors can also be decreases which would cause a decline. The demand factor is to achieve the higher production potential created by the supply factors. Households, businesses and government need to purchase the output of goods and services. The efficiency factor is to reach its full production potential. Economy needs to achieve economic efficiency and full employment.…

    • 473 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Discuss the factors holding back countries growth, and evaluate the measures used to aid growth in the future…

    • 2079 Words
    • 9 Pages
    Good Essays
  • Good Essays

    Economic growth - is influenced by various factors such as development on stock markets, which is strongly influenced by political activities around the world, prices of raw materials (metals, oil etc.) but also prices of energy and future of the economical development in general.…

    • 1292 Words
    • 5 Pages
    Good Essays
  • Satisfactory Essays

    Examine and analyse India’s saving and investment ratios since Independence. Relate it with the growth theories you have learnt and India’s GDP growth rates.…

    • 459 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    The augmented Solow model was proposed by Mankiw, Rower and Weil (MRW) in their treatise “A Contribution to the empirics of Economic Growth”. To better explain the variation in living standards across regions, they propose a model that adds human capital accounting for the fact that labor across different economies can possess different levels of education.…

    • 1012 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Harrod – Domar Model

    • 707 Words
    • 3 Pages

    Both Harrod and Domar are interested in discovering the rate of income growth necessary for a smooth and uninterrupted working of the economy. Harrod and Domar assign a key role to investment in the process of economic growth. So long as net investment is taking place, real income and output will continue to expand.…

    • 707 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Five Year Plans of India

    • 3170 Words
    • 13 Pages

    The target growth rate was 2.1% annual gross domestic product (GDP) growth; the achieved growth rate was 3.6%[5] The net domestic product went up by 15%. The monsoon was good and there were relatively high crop yields, boosting exchange reserves and the per capita income, which increased by 8%. National income increased more than the per capita income due to rapid population growth. Many irrigation…

    • 3170 Words
    • 13 Pages
    Powerful Essays
  • Best Essays

    The issue of population and economic growth is as old as the discipline ofeconomics itself. The debate on the relationship between population andeconomic growth could be traced back to 1798 when Thomas Malthus published the book An Essay on the Principle of Population. Malthus claimed that there is a tendency for the population growth rate to surpass the production growth rate because population…

    • 1892 Words
    • 8 Pages
    Best Essays
  • Good Essays

    Budget Report

    • 13120 Words
    • 53 Pages

    the splendid support that I received from all sections of the House as well as the…

    • 13120 Words
    • 53 Pages
    Good Essays
  • Powerful Essays

    Indicative Planning

    • 5742 Words
    • 23 Pages

    A question frequently asked today is whether planning has any relevance in a world of economic liberalization and the market economy. The short answer is that it does, but not the kind of planning we practised in the past which derived its rationale from the belief that centralized control on resource allocation, with extensive intervention in private sector decision making, was necessary to achieve rapid growth. Amartya Sen’s article, which is reprinted in this volume but which first appeared in the Seminar issue on Freedom and Planning almost fifty years ago, provides a flavour of the earlier approach. Sen argued then that planning was necessary not only to achieve distributional objectives – which he points out is a traditional and much discussed basis for state intervention – but also to achieve a high rate of growth. He recognized that the industrialized world had achieved industrialization without planning and acknowledged that we could also follow this path, but warned that if we did, it would take us more than a hundred years to industrialize whereas the experience of the socialist economies showed that a much faster transition was possible with socialist planning.…

    • 5742 Words
    • 23 Pages
    Powerful Essays
  • Good Essays

    Modern Technology

    • 764 Words
    • 4 Pages

    The target growth rate was 2.1% annual gross domestic product (GDP) growth; the achieved growth rate was 3.6%[5] The net domestic product went up by 15%. The monsoon was good and there were relatively high crop yields, boosting exchange reserves and the per capita income, which increased by 8%. National income increased more than the per capita income due to rapid population growth. Many irrigation projects were initiated during this period, including the Bhakra Dam and Hirakud Dam. The World Health Organization, with the Indian government, addressed children's health and reduced infant mortality, indirectly…

    • 764 Words
    • 4 Pages
    Good Essays