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Kaldor Model Analysis

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Theories of Growth and Regional Development:
(a) Harrod-Domar Model: The Harroad-Domar model of economic growth is based on the experiences of advanced economies. It attempts to analyse the requirements of steady growth in advanced countries. The model discovers the rate of income growth necessary for a smooth and uninterrupted working of the economy. It revives the importance of investment for the growth of the economy. So, as long as net investment is taking place real income and output will continue to expand.
(b) Kaldor-Model: The Kaldor model is an attempt to make the saving-income ratio, a variable in the growth process which was assumed constant in Horrod-Domar model. In the Kaldor model growth and the progress of the country depends …show more content…

It is constant with the concept of equilibrium growth. In steady state growth, all variables such as output, population, capital stock, saving, investment and technical progress either grow at constant exponential rate or are constant. (g) Fel’dman Model: The Fel’dman model is a theoretical model which is concerned with long run planning. He emphasised that even within a short duration backward economy can be changed as a developed one. He did not advocate growth with crises but a growth that was self sustained. This model analysed the generating effect of investment and not the income generating effect.

(h) Mahalanobies Model: Mahalanobies developed a single sector model in 1952, based on the variables of national income and investment. Further, in 1953 he developed it into a two sector model where the entire net output of the economy is to be produced in only two sectors namely investment goods sector and the consumer goods sector. Next he developed a four sector model in 1955, the four sector economy consists (i) the investment goods sector (ii) the factor producing consumer goods sector (iii) the small household producing consumer goods sector (iv) services producing sector. This model gives the growth path for the …show more content…

All underdeveloped countries possess inadequate resources in nature. So simultaneous investment in all sectors becomes impossible. So investments in selected sector alone will induce the economic development. Thus the particular economy is more from unbalanced to balanced growth level. Hirschman propounded the unbalanced growth theory in a systematic manner. Economists like Singer, Kindle Berger, and Streetman have expressed their view on unbalanced growth

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