What are harrod-domar restrictions, Business Economics

What are Harrod-Domar restrictions?

Harrod-Domar restrictions:

• Non economic social, cultural, political and institutional circumstances are unimportant into growth process

• While capital formation is significant the development of human capital and effective use of latest technologies also raise Gross Domestic Product. Investment is an essential but not adequate condition for improvement

• Suppose closed economy. Within open economy, additional Y might be used for M and not S

• This is complicated to stimulate the desired level of domestic savings

• Meeting a savings gap through borrowing through overseas cause’s debt repayment difficulties later.

• The sector structure of the economy significant (that is agriculture verses industry verses services).

Posted Date: 8/29/2013 6:37:00 AM | Location : United States

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