Many countries also expand their workforce by making it possible for more women to join the workforce, giving a boost to the. The path of economic development in an under-developed country like India is full of hurdles and impediments. Clearly established and enforced property rights provide people with the incentive to work and save. They cannot hope to make much progress by adopting a laissez faire economy. Along with these pro-growth proposals, we should incentivize Congress to cut the deficit. But it has also been argued by some modern economists that with the growing momentum of economic development, standard of living of the general masses increases which would ultimately create a better environment for the control of population growth. Although the adoption of a democratic regime is not sufficient to achieve greater economic growth, democracy with good institutions might be.
The following three conditions must be satisfied for attaining technological advancement in a country: a Making provision for large investments in research, b Ability to realize the possibilities of using scientific inventions and innovations for commercial purposes and expansion and diversification of the market for its product. It has been shown, both theoretically and empirically, that technological progress is the main driver of long-run growth. New York: Cambridge University Press. Non-Economic Factors : Economic factors alone are not sufficient for determining the process of economic development in a country like India. Business environment is the sole determinant of economic development of a country.
While this variable does not help authoritarian governments to achieve good economic performance, it does provide a positive impact on democratic governments. In fact, natural resources are a necessary condition for economic growth but not a sufficient one. These factors may include increased investment in assets and infrastructure to boost the efficiency of production and transportation of goods. It also might suggest that political institutions work as a substitute for democracy in authoritarian regime, generating economic growth. None of the statements is correct.
Ultimately, it is a human enterprise. For at least two reasons free markets fail to allocate resources in case of high technology, viz. Measures to encourage competition include privatization of state industries, deregulation and laws to protect business. Louis Fed will be free to use any ideas, concepts, artwork, inventions, developments, suggestions or techniques embodied in your comments for any purpose whatsoever, with or without attribution, and without compensation to you. It is because such capital generates technological externality or knowledge spill. Labor and capital are other that may generate economic growth if their capacity is increased, as are improvements and innovations in technology that may cut the costs of production of existing goods and make possible the invention of new products.
The resources beneath the land or underground resources include oil, natural gas, metals, non-metals, and minerals. Thus in order to accelerate the pace of economic development the government must make necessary arrangement for the maintenance of law and order, defence, justice, security in enjoyment in property, testamentary rights, assurance to continue business covenants and contracts, provision for standard weights and measures, currency and formulation of appropriate monetary and fiscal policy of the country. Expanding the quantity and quality of the workforce is another of the factors of economic growth. The presence of an incentive system and the institutions mat create it guarantees that economic growth will occur. The opinions expressed are those of the writer. In the Solow model the saving rate determines the steady-state levels of capital and output.
Growth is based on the expansion and application of human knowledge, which is limited only by human imagination. In reality, we find that the potential for beneficial spillovers in these cases is very large. Thus it is quite important to raise the rate of capital formation so as to accumulate a large stock of machines, tools and equipment by the community for gearing up production. In India, as per 1991 census, about 66. By shortening the duration of unemployment insurance and requiring those receiving checks to volunteer at a non-profit, both parties can benefit. More efficient exploitation of the land, including natural resources and minerals such as oil and gas, can promote economic growth.
Economic Factors : Economic environment is working as an important determinant of economic development of a country. Similarly, Japan has a small geographical area and few natural resources, but achieves high growth rate due to its efficient human resource and advanced technology. In spite of these we cannot deny the importance of raising the saving rate. Such capital refers to the knowledge and skills that workers achieve through education and training which lead to skill formation, improved efficiency and enhanced productivity. So if at any point, there is political upheaval in a country or violence, the investors start pulling out one by one.
Political polarization also has an opposing effect under democratic and authoritarian regimes. In other words, technology can be defined as nature and type of technical instruments used by a certain amount of labor. Before publishing your Articles on this site, please read the following pages: 1. Highways linking one state with others reduce the cost of transporting goods and stimulate tourism and other industries. As a consequence, some groups or individuals will be able to gain more benefits than others given the set of the preexisting economic conditions and resource allocation.
Statements 2 and 3 are correct. Social factors involve customs, traditions, values and beliefs, which contribute to the growth of an economy to a considerable extent. Defenders say that it is the primary path to the rising living standards nearly universally desired by people, that it need not debase the environment, and that there are no indications that we are running out of resources. Wages in other East Asian countries earn up to 10 times more than Chinese workers. At the same time the government can play an active role in promoting a few specific industries which are the carriers of rapid technological progress, called knowledge-intensive industries or sunrise industries.