SLIDE 2

Classic Theories of Economic Development; with Four

Approaches
-The Linear Stage of Growth Models
-Structural Change Model
-International Dependence Revolution
-The Neoclassical Counterrevolution; Market Foundation

SLIDE 3
 So lets start in the Linear Growth Theory
Madaming mga theories or mODELS under Linear Growth but
mag fofocus lng tayo sa dalwang,

SLIDE 4
The First one is Walt Whitman Rostow,
One of the first growth theories was that proposed by
American economic historian Walt Rostow in the early 1960s. As
a vigorous advocate of free market capitalism, Rostow argued
that economies must go through a number of developmental
stages towards greater economic growth. He argued that these
stages followed a logical sequence; There are 5 stages na
sinasabi ni Rostow, na naka pre set ang lahat kung baga ay
tapusin mo muna ang stage nato bago ka makapunta sa susunod
na stages . So you really have to undergo to different stages. The
stages are 5 economies. Ito daw yung mga pwedeng pagdaanan
ng isang economiya.
SLADE 5
 The 5 stages of economic growth model, the first one is the
traditional society.
This is a mostly backward society with no access to
science and technology where most of its resources are detected
to agriculture use. And agriculture productivity is in subsistence
level and there is limit in market integration.
- SO IN THIS STATE WE COULD FIGURE OUT THAT
ACTIVITIES OF A CERTAIN PLACE IS SOMEWHAT VERY
BASIC. SO,FOR EXAMPLE IN AGRICULTURE THEY DO THE
BASIC TECHNIQUES LIKE USING ONLY THE CARABAO
WITHOUT ANY HELP FROM A TECHNOLOGY OR ANU
EQUIPMENT. SO THEIR LIVES IN THIS STAGE IS THEY ARE
GOING TO CULTIVATE OR TO PRODUCE SOMETHING FOR
THEIR CONSUMPTION ONLY BECAUSE DUE TO THAT
SITUATION THAT THEY ONLY HAVE THIS VERY DIFFICULT
FACILITIES , MAYBE THEY WILL JUST PRODUCE A LITTLE.

SLIDE 6
 So let us come to the stage 2 the PREPARATORY STAGE
There is an expansion in output which extends beyond
agriculture produced the manufactured goods. As a result of
better savings and investments in education there is more
knowledge surrounding the use of the technology in various
sectors of the economy in this stage there are lower levels of
specialization.
- SO IN THIS STAGE, ANG INITIAL DEVELOPMENT SINCE
MORE ON THEM ARE ALREADY THROUGH EDUCATION
NALAMAN NA NILA ANG TECHNOLOGY AND THEY ARE
APPLYING IT IN THE ACTUAL SCENARIO IN LIKE EXAMPLE
IN AGRICULTURE BECAUSE OF THE EDUCATION THEY
HAVE ACQUIRED, KAYA NAG IISIP SILA NG TEKNOLOHIYA
AT KUNG ANO ANG GAGAMITIN NILA.KAYA AT THIS STAGE,
LET US SAY THERE IS SOME WHAT THE INCOME OF A
CERTAIN ECONOMY IS, THERE WOULD BE MORE GAIN
ACQUIRED FOR MORE GAINS REALIZED THAN THAT OF
THE FIRST STATE.

SLIDE 7
 SO the third stage is the take-off
At this stage revolutionary changes occur in both
agriculture and industry to attain self-sustaining economic growth.
There is a great urbanization and rise in human capital
accumulation.
- IN THIS STAGE INDUSTRY SOMEWHAT BECOME MORE
POPULAR OR GAINING A LOT THAN OF THE CULTURE
SINCE IN INDUSTRY LIKE THE FACTORIES OR MAKING
MANY PRODUCE OUT OF THE RAW MATERIALS THAT IS
WHAT WE CALL INDUSTRY MANY SHIFT TO INDUSTRY
SINCE IT GAINED A LOT SEEMS THE DEMAND FOR ITS
PRODUCE HAVE BEEN INCREASED ALSO SO SOMEWHAT
WE COULD FIGTURE OUT THAT. AT THIS STAGE PEOPLE
ARE UNDER ON THE MOVE TO MODERNIZATION. AS
ROSTOW SAY THIS IS NOT HAVE ADAPTED THE TERM
TRANSITION WHICH DESCRIBES THE PROCESS OF A
TRADITIONAL ECONOMY. THAT IS THE STATE ONE AND TO
BECOMING A MODERN ONE IN THIS STAGE.
SLIDE 8

DRIVE TO MATURITY
This stage takes place after a long period of time. The
population involved in agriculture declines while industry
becomes more diverse. Overall income per capita
increases. The rate of savings and investments is such
that it can automatically sustain economic growth

SO LET'S GO TO AS RISTO DEFINES IT AS THE PERIOD

WHEN A SOCIETY HAS EFFECTIVELY APPLIED THE RANGE
OF MODERN TECHNOLOGY TO THE BOOK OF IT'S
RESOURCES, SO SOMEWHAT FULL FORCE AND
TECHNOLOGY AND IN A STAGE THE COUNTRY BENEFITED
FROM THE FULL COURSE OF TECHNOLOGY AND THIS.
SOMEWHAT YOU COULD SAY THAT ACADEMY HAS RISEN
UP FROM THAT OF THE LOW INCOME EARNING SOCIETY
AND TO THIS ONE SINCE WITH THE USE OF TECHNOLOGY.

SLIDE 9
 So the fifth stage is the STATE OF MASS CONSUMPTION
At this stage a country’s demand shifts from food, clothing
and other basic necessities to demand for luxuries. To satisfy
these needs new industries involve their selves in mass
production to match consumption.
-SO OBVIOUSLY WE CAN SAY THAT ON THIS STAGE
SOMEWHAT HIGH STANDARD OR HIGH INCOME THEN
HERE THE INCOME OF THE COUNTRY. IT'S A MUCH VERY
STABLE THAT THE PEOPLE AFFORD FOR DID NOT JUST
FOR FOOD NOT JUST FOR COATING OR BASIC NEED OF
COURSE.
-THE DEMANDS WERE FOCUSED AND LUXURIOUS LIKE
BUYING LUXURY CARS, BRANDED APPAREL, AND SO ON
AND SO FAR. SO SOMEWHAT THE ECONOMY IS GAINING A
LOT AND THE TURNOVER OR CAPITAL IS QUITE HIGH
BECAUSE PEOPLE TEND TO HAVE. SO MUCH RESOURCES,
SO MUCH MONEY TO BUY AND THEN THERE WAS
INDUSTRY WHERE DIVERSE AND THEN WE COULD SAY
THAT SINCE THIS IS THE LAST STAGE. SO THIS IS THE
MOST STABLE STAGE AN ECONOMY ON THE COUNTRY.
-SO THAT IS THE END OF THE STAGE UNDER BRISTOL,
SO LET US COME TO THE NEXT PERSONALITY AND
THE THEORY OF LINEAR GROUP DEVELOPMENT.

SLIDE 10
 WHICH IS HERROD AND DOMAR MODEL
- The Harrod-Domar model is a model of economic growth. It
is used in development economics to explain an economy's
growth rate in terms of the level of saving and capital. It suggests
that there is no natural reason for an economy to have balanced
growth. The model was developed independently by Roy F.
Harrod in 1939, and Evsey Domar in 1946.
- THAT'S WHY TINAWAG ITONG HARROD-DOMAR, MODEL
OF GROWTH THEORY.
- - So Harrod and Domar is emphasizing on savings which is very
important. According to them since what they said that save and
invest certain proportion of their income to grow at a certain rate
failure to develop is caused by the failure to save and accumulate
capital. So again for takeoff to happen, saving must be
accumulated.
-

SLIDE 11
So according to Harrod and Domar
- There are two determinants of the rate of growth of the country.

-1. There first looks at the relationship between changes in the

capital stock of a country, that is its capital investment, and its
output, called the capital-output ratio.

-now in simple talking of course when we invest on something of

course we would expect realizing a good output now that is what
Herod and DOmar is saying that when a country invest on some
programs the ratio of it with its output should be a rich a certain
level that we can say that the economy of that country is stable.

-2. The second is the relationship between savings and national

income, is called the savings ratio, and this shows how much is
saved.
-So now when we say national income it would compose a ratio
of it is savings. So, now what they're trying to convey to us, is
that part of that income there is a percentage a cut a percentage
that a country should have a savings in order for that country to
be stable the growth economy or to say the economy of that
country is stable.

So , The model indicates how these two ratio affect the rate of
growth. Essentially, the higher the savings ratio the more an
economy grow and the higher the capital-output ratio the higher
the rate of growth.

-This is the most important part of the some of the summary of the
theory of Harrod and Domar.