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Different aspects of econimic growth - Essay Example
Pages 3 (753 words)
Economic growth, simply defined as the expansion of a national economy's capacity for the production/manufacture of goods and services, constitutes that one challenge which confronts all world economies and, accordingly, has been the focal point of a large array of economic theory…
Upon undertaking the stated consideration through reference to the classical and the neo-classical economists, one finds that growth is alternately linked to capital accumulation and technological progress.
Classical economists maintain that economic growth is inextricably linked to the unlimited supply of labor. As Lewis (1954) explains, plentiful supplies of cheap labor comprise the key to both economic growth and sustained growth. The presence of unlimited labor supplies at subsistence wages functions as a predicator of expanded growth, insofar as cheap labor implies low production costs and plentiful labor enables the evolution of several labor-intensive industries, implying that growth is not reliant on one industry and sector but on several.
The neoclassical economists, as may be inferred from both Lewis (1954) and Allen (2005) largely concede to the above-mentioned but highlight their limitations. Quite simply stated, unlimited supplies of labor is not a permanent situation with the American South's reliance on slave labor and the subsequent abrupt halt of that reliance, functioning as a case in point. ...
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