Economic Growth Depends on Which of the Following

The evolution of economic growth theories can be drawn back from Adam Smiths book Wealth of Nation. In his book he emphasized a view that the growth of an economy depends on division of labor.

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The first wave of the more recent incarnations of growth theory following Romer 1986 and Lucas 1988 differed in the sense that they emphasized that externali- ties from physical and human capital accumulation could induce sustained steady-state growth.

. A 2016 meta-analysis found that the effect of inequality on growth is negative and more pronounced in less developed countries than in rich countries though the average impact on growth was not significant. However they also stayed squarely within the neoclassical tradition of explain- ing differences in growth rates in. The most necessary condition for the growth of an economy is that the demand created due to newly generated income should be sufficient enough.

In particular the Four Tigers the best performing economies in the region display exceptional investment rates and an extremely. The study also found that. The following table shows information about individual wealth distribution in different countries from a 2018 report by.

The main empirical argument that a high rate of investment and a concentration on exporting have caused economic growth is the strong positive correlation between these two variables and the rates of growth found in the East Asian economies.

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