Matakuliah
Tahun
: <<EKONOMI PEMBANGUNAN>>
: <<2009>>
Historic Growth and Contemporary Development
Pertemuan 3
The growth position of the less developed
countries today is significantly different in
many aspects from that of the presently
developed countries on the eve of their entry
into modern economic growth.
-Simon Kuznets, Nobel Laureate Economics, 1971
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Material Outline
• Factors or components of economic growth
• Kuznets’s Characteristics of Modern Economic
Growth
• Differing initial conditions-differences that require
a much amended analysis of the growth prospects
and requirements of modern economic developed
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Three factors or components of economic growth
1. Capital accumulation, including all new
investments inland, physical equipment, and
human resources
2. Growth in population and hence eventual growth in
the labor force
3. Technological progress
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Population and Labor Force Growth
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Effect of Growth of Capital Stock and Land on the
Production Possibility Frontier
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Technological Progress
• Neutral technological progress
• Laborsaving technological progress
• Capital-saving technological progress
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Effect of Technological Change on the Production
Possibility Frontier
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Kuznets's Six Characteristics of Modern Economic
Growth
1.
2.
3.
4.
5.
High rates of growth of per capita output and population
High rates of increase in total factor productivity
High rates of structural transformation of the economy
High rates of social and ideological transformation
The propensity of economically developed countries to reach
out to the rest of the world of markets and raw materials
6. The limited spread of this economic growth to only a third of
the world’s population.
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Significant differences in initial conditions-differences that require
a much amended analysis of the growth prospects and
requirements of modern economic development:
1.
2.
3.
4.
5.
6.
7.
8.
Physical and human resource endowments
Per capita incomes and levels of GNP im relation to the rest of the world
Climate
Population size, distribution and growth
Historical role of international migration
International trade benefits
Basic scientific and technological research and development capabilities
Stability and flexibility of political and social institutions
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