Comparative Analysis of Growth Models

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Comparative Analysis of Growth Models

• Econ 403 International Economic Development
• Carlos A. Benito

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Harrod-DomarWithout adjustment mechanism
Y,S,D
Y
g s.a - d
Constants!
dY
dK
There is not steady state
S
In
D
S
D
K
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Kaldors Growth ModelVariable Saving Rate
Y,S,I,D
Y
g s.a - d
Y0
d.K
S
In
S
D
K
K0
Steady state
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Solows Growth Model The Production Function
g s.a - d
y
yf(k)
y0
(nd)k
s.ys.f(k)
k
k0
Steady state
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Periphery country growth modelThe role of
International Terms of Trade
Y(K)
Y,X,M
(dc)K
M(Y) for pm
C G
M(Y) for pmgtpm
I
DCm
pm.M X
K
pm.M X Mm.Y
No steady state but Import constraint
pf(t) dp/dt gt 0
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Marxs Accumulation ModelFactor Distribution of
Income and Growth
yg(k)
y,w, ? Per worker
g e.a - d
yn(k)
?(e)
D
W
?
k, per worker
yg GDP yn NDP ? profit w wage rate

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Marxs Accumulation ModelRegressive Distribution
of Income
No steady state but social class conflict
yg(k)
e, u
y,w, ? Per worker
g e.a - d
yn(k)
wmin
?(e)
D
e ?/(w ?)
W
u
?
u unemployment rate e exploitation rate wmin
minimum wage rate
k, per worker
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Development-Underdevelopment ModelInternational
Distribution of Income
Indipendence movements
ywg(k)
p, u
y,w, ? Per worker
ywn(k)
wsub
Wd?d
Dd
p Pd/Pu
Wu
u
?dwd
u under-employment rate p terms of trade
wsub subsistence income
k, per worker
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