Search

SUMMARY The paper presents a multisectoral growth model which is readily computable with non-linear production functions and is descriptive of economic conditions prevailing in over-populated countries. The purpose is to show the optimal allocation of resources over time in a labor surplus economy if the dominant social consideration is to increase the rate of employment as fast as possible. Given an institutionally stipulated minimum wage rate and certain other assumptions, the path that maximizes the rate of economic growth also approximates the path that minimizes the time needed to attein full employment as long as the rate of increase of the capital stock exceeds the rate of growth of the potential labor force. A rigorous proof of the proposition is presented with the help of the calculus of variations and the numerically computable solution of the growth model is derived from the conditions underlying the optimum at any moment of time. The model is an analogue of competitive markets under appropriate demand conditions. In addition, since it is computable, the model can be used by economic planners in countries where large scale unemploffment or under-employ-ment exists. [ABSTRACT FROM AUTHOR]

SUMMARY The purpose of this paper is to offer an appraisal, in the light of the theory of economic policy, of some recent attempts to survey the fiscal systems of a number of SUPHAN ANDIC AND ALAN PEACOCK African and South American countries. The authors contend that any recommendations about the size and structure of the fiscal system must be clearly related to specific policy aims which are embodied in an economic model in which the variables and parameters are adapted to the economy in question. They also stress that recommendations concerning changes in the administrative structure depend on the type of model considered relevant to the particular circumstances of the economy under scrutiny. The various fiscal surveys are then examined, it being admitted from the out-set that they have been conducted under difficulties (e.g. lack of statistics, sensitivity of the sponsors to criticisms of existing policies). Nevertheless, as the surveys rarely do more than list objectives without reference to orders of priority and are frequently vague about the type of economic models employed and the values of parameters, it is impossible to evaluate their policy recommendations. [ABSTRACT FROM AUTHOR]

SUMMARY This paper touches on three models of growth, viz: the F el'dman (Soviet) model, the H arrod-D omar model and the M ahalanobis (Indian) model. Of these three, the ancestry of the first is maintained in respect of both its contents and historical sequence. It is argued that the Soviet model is superior to the other two models because it recognizes the significance of a number of factors, viz: (a) the pattern of income distribution, (b) increase in the effective utilization of the existing capital stock, (c) distinction between degrees of effective utilization of the old and the new capital stocks, and lastly, (d) consideration of the rate of growth in terms of capital capacity as well as in terms of the absorption of a growing labour supply. In other respects, the model runs more or less parallel to the H arrod-D omar and M ahalanobis models. Some striking similarities between the Soviet and Indian models exist in spite of the differences in economic and political conditions of the two countries. These are: (a) the Marxian setting of two departments of a closed economy, (b) the aim of achieving a high rate of investment by expanding the capital goods sector and (c) a relative neglect of propensity to save as a crucial variable in the process of growth. The affinity between the Indian and the Soviet models is so strong that the former seems to answer the Soviet rather than the Indian conditions. [ABSTRACT FROM AUTHOR]