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Inforgraph

economic development

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JC Camille Sagun
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22 views1 page

Inforgraph

economic development

Uploaded by

JC Camille Sagun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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The harrod-

doma r growt h
model
“The economic growth of a country is determined by the ortanc
m p e
level of savings and the capital output ratio ( Efficiency I Low savings rates
Capital ) “ (Macro, 2017). in developing
IMPACT OF INCREASING CAPITAL The transfer of countries
INCREASED SAVINGS INCREASED INVEST capital to contribute to low
25% 25% developing economic growth,
economies should creating a cycle
enable higher that can only be
growth, which in broken by
Harrod-Domar increasing savings
turn will lead to
Model to fuel sustainable
higher savings and
economic
growth will become
development.
more self-
HIGHER STOCK
HIGHER ECONOMIC GROWTH 25% sustaining (ECON
25% 45, n.d.).

ECONOMIC
Level of savings (s) =
Average propensity
to save (APS) – which
is the ratio of
national savings to
national income.
1 Level of Savings The capital-output
ratio = 1/marginal
higher savings enable product of capital.
higher investment
The capital-output
ratio is the amount of
capital needed to
increase output.
2 Capital- A high capital-output
Output
Don't Make The Schedu Ratio ratio means
le
Too Tight investment is
A lower capital-output ratio
inefficient.
means investment is more
The capital-output
efficient and the growth rate
ratio also needs to
will be higher.
take into account the
depreciation of
existing capital
ECON 45. (n.d.). Economic development: Unit 2 - Theories of development.

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