Development Economics (L4).pptVIP

Mozaffar Qizilbash In its various stages development economics has remained concerned with growth (even when the focus is on human development, e.g. Ranis, Stewart and Ramirez, 2000) In its early days it was much influenced by Harrod-Domar and Solow models and later by endogenous growth models Some preliminary definitions: C is consumption, S is savings, Y is income, t is a time period. (1) Y(t) = C(t) + S(t) (2) Y(t) = C(t) + I(t) From this, (3) S(t) = I(t) d = depreciation rate of capital. K is ‘physical’ capital. The following is true by definition: (4) K(t+1) = (1-d) K(t) + I(t) Write t