Growth Theories And Their Relevance To Less Developed Countries
The development of the theories of economic growth – or what Marshall regarded as long-run equilibrium analysis – in the last fifty years has been remarkable. Such growth may be explained partly by the desire to analyse the problems and policies for economic development of many war-ravaged countries after the Second World War and partly by the necessity to stimulate growth in many poor countries in Asia, Africa and Latin America. Sometimes, growth just happened and theorists decided to explain it. The idea of promoting growth is not new in the history of economic thought. Indeed, the classical economists envisaged a scenario to describe the process of economic growth. In this chapter we shall try to analyse the basic features of some of the major theories of economic growth and show their relevance to the problems of economic development of the LDCs. We shall start off with discussion of the classical theory of growth.