Capital and Resources

▪ Why is a country poor or not growing? ▪ The failure of some economies to produce
– caused by a lack of capital or enough economic resources to meet the
resources. What exactly are capital and needs and objectives of growth is the root
resources? cause of economic development failure.
➢Capital - a productive resource that is a
result of investment.
➢Types of capital: natural capital,
physical capital, financial capital,
human capital, social capital.
➢Resources - factor of production or
inputs required to produce a good or a
service, such as land, labor, and capital
➢Capital – is not the main input but part
of the resources (material and
intellectual) produced by the economy.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 1

 What exactly is capital?
A simple definition Types of Capital
▪ The basic idea is that capital is something ▪ natural capital, physical capital, financial
that generates income/output (Y). capital, human capital, social capital.
▪ Capital includes non-consumable inputs
and, like capital used in the manufacturing
process, is subject to depreciation.
▪ Capital must be created and then
maintained through human effort, which
incurs costs.

A more precise definition

▪ A productive resource that is the result of
investment.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 2

 CAPITAL: a productive resource that is a result of
investment

Conventional economic thinking

Non-human based capital Human-based capital Human Capital Theory

`
Conventional Capital

Natural Physical Financial Education Skill Health Technology

Capital Capital Capital

New wave of economic thinking

Investment in social relational aspect of human

Social Capital Theory

Norms Social relation Trust

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 3
 Resources: factor of production or inputs required to produce a good or a service, such as
land, labor, and capital

LAND

ENTREPRENEUR PRODUCTION

LABOUR

CAPITAL

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 4

 Classical Growth Theory of Adam Smith
▪ Adam Smith's theory explains the factors
that contribute to the problem of
continuous capital formation or resources
mobilization.
▪ 2 important factors of economic growth:
i. Labor specialization (a division of labor)
ii. Labor productivity
Benefits of labor specialization:
▪ Specialization enables economics to;
1. Increase productivity - through learning
by doing and competition (competitive)
2. Reduce costs and prices (production and
output)
3. Increase real wages, purchasing power,
demand and market competition.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS
▪ Three ways specialization increases labor
productivity and economic growth
1. Economic of scale
▪ Production can be done on a large scale
without having to be distributed according
to small production units and this will
ensure,
➢economic resources are used productively.
➢concentration - employees are more
focused on a task and
➢improve ‘dexterity’ (skill in using your hand
or your mind)
5
 Classical Growth Theory of Adam Smith
• Three ways specialization increases labor
productivity and economic growth:
2. Distribution & efficient use of economic
resources
▪ Economic resources are distributed based
on different fields of work/tasks according
to the capabilities and abilities of the
workers/laborers and this will encourage
➢Time savings - employees do not need to
perform various work routines.
➢The idea of free trade and specialization
by countries - countries need to specialize
in the production of products that they
have an advantage.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS
3. Technological Advances
▪ Through the introduction of labor-saving
equipment/machines to facilitate a task,
specialization has the potential to
contribute to long-term technological
advancement.
▪ Mastery - the more time an employee
spends performing a task (using machines,
for example), the more skilled and
productive the employee becomes.
▪ Employees are also able to create new
idea/innovations to improve existing
technology (according to the times).
6
Bangladesh on the brink of becoming top global exporter of cotton apparel overtaking China
US brands are shifting their sourcing orders to other markets, including Bangladesh, to minimize potential risks related to logistics and politics
• Bangladesh is on the verge of surpassing China as the world's leading exporter of cotton apparel, and
an increase in demand is anticipated to boost cotton consumption, as stated by the US Department
of Agriculture (USDA).
• Referring to the annual fashion industry study conducted by the United States Fashion Industry
Association (USFIA), US brands are shifting their sourcing orders to other markets, including
Bangladesh, to minimize potential risks related to logistics and politics.
• According to the USDA's recent report on global cotton trade, Bangladesh, India, and Vietnam are the
three primary sources from which retailers intend to expand their sourcing over the next two years,
diverting orders away from China which currently holds the top spot in apparel exports.
• In its report titled "Cotton: World Markets and Trade," released on August 11, the USDA noted that
the USFIA study reveals that Bangladesh outperforms other countries in terms of cost
competitiveness as an apparel supplier.
• The projection made by the US agency follows Bangladesh's achievement of nearly $47 billion in
woven and knitwear shipments during the fiscal year 2022-23, surpassing the target set for that
period.
• Most of Bangladesh's factories produce garments made from cotton, and over 70% of their export
shipments consist of cotton products, according to industry insiders.
• The World Trade Organization identified Bangladesh as the world's second-largest garment exporter
after China in 2022.
• The USDA indicated that Bangladesh aims to achieve more than $50 billion in apparel exports in the
fiscal year 2024, slightly exceeding the previous year's figures, which is seen as "evidence of the
government's anticipation of increased demand."
• The US agency's forecast predicts an 800,000-bale, or 10%, year-on-year increase in Bangladesh's
cotton consumption due to the escalating apparel exports in the fiscal year 2023-24. Apparel
contributes to over 80% of the country's total annual exports, with the current export value of nearly
$47 billion being more than double what it was a decade ago.
Source: Dhaka Tribune, 13 Aug 2023

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 7

 Table 2.1 Top Apparel Exporters in 2022 (By value)
▪ Bangladesh and Vietnam are among the labor intensive countries
that enjoy greater benefits from the specialization of cheap labour
in the manufacturing sector particularly the apparel, textile and
garment industries.
▪ China continued to lose market share in clothing exports, which
benefited other leading apparel exporters in Asia. Notably, for the
first time, Bangladesh surpassed Vietnam and ranked as the world’s
second-largest apparel exporter in 2022.
• In value, China remained the world’s largest apparel exporter in
2022. However, China’s clothing exports experienced a growth of
3.6 percent, below the global average of 5.0 percent, positioning
China at the bottom of the top ten exporters (Table 2.1).
• China’s global market share in clothing exports dropped to 31.7
percent in 2022, marking its lowest point since the pandemic and a
significant decrease from the approximate 38 percent recorded
from 2015 to 2018. In fact, China lost market share in almost all
major clothing import markets, including the US, the EU, Canada,
and Japan. The concerns about the risks of forced labor linked to
sourcing from China and the deteriorating US-China relations were
among the primary factors driving fashion companies’ eagerness to
reduce their ‘China exposure” further.

Source: World Trade Organization, WTO 2023

*Note: The majority of exports from Hong Kong is reexport

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 8

 Classical Growth Theory of Adam Smith
Assumptions
1. Economic activity produces a surplus/profit - 4. Closed economy - no international trade
the value of output/product exceeds the cost 5. No fixed capital and advances need to be
of production.
paid to labor
2. Labor-the input required for each production
activity but labor is not the only input ▪ Why pay advances? - incentives to labor
involved. because production takes time, used to
3. Production involves the time in which there buy consumption goods while waiting for
is a lag between the period the input
injection is made with the output and the production and output to be produced.
‘surplus’ produced.
▪ These advances cover ‘wage goods’ and
the total volume of these goods is referred
The production function is stated as to as the wage fund/working capital - paid
Y = f (L, t) ………………………… (1) to labor at the start of working period.
where,
▪ Who pays the wage fund?
Y = output
L = labor
t = time

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 9

 Classical Growth Theory of Adam Smith
Wage fund can be written as 7. No fixed capital
𝐾𝑡 = 𝑘𝑌𝑡−1 ……………………………….(2) ▪ only wage fund/working capital - paid to
with, labor at the beginning hired to work
K = wage fund/working capital
Y = output
k = share of output paid to labor as a
wage fund, where (0 <k <1)
ABC CO. GHI CO. MNO LTD.
6. Productive & unproductive workers
It is the leader in tech and can It has big spending budget and It has many affiliated entities to
bring more revenue for us can improve our sales refer our business too
▪ Smith’s important and distinctive
contribution in understanding the growth
process.
▪ Productive labor - engaged in activities
that produce ‘surplus’ overcoming the cost
of living in the form of wage goods
(wages) and not exceeding the cost of
production.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 10

 Classical Growth Theory of Adam Smith
Smith's Equation of Growth ▪ By substituting eq. (2) into eq. (5),
▪ Labor productivity (p) = output divided by 𝑌𝑡 =
𝑃
𝑘𝑌𝑡−1 (6)
total labor or 𝑤

p = 𝑌𝑡 /𝐿𝑡 or
𝑌𝑡 = p. 𝐿𝑡 (3) ▪ By dividing eq. (6) by 𝑌𝑡−1 then
𝑌𝑡 𝑃
= k (7)
𝑌𝑡−1 𝑤
▪ Real wage rate, w = wage fund divided by
total labor, ▪ The equation of the output growth rate is
𝐾𝑡 𝐾𝑡
w= or 𝐿𝑡 = (4) obtained when,
𝐿𝑡 𝑤

𝑌𝑡 −𝑌𝑡−1 𝑌𝑡
▪ By substituting eq. (4) into eq. (3), = -1
𝑌𝑡−1 𝑌𝑡−1
𝐾𝑡 𝑝 𝑝
𝑌𝑡 = p. or 𝑌𝑡 = (𝐾𝑡 ) (5) g = k-1
𝑤
𝑤 𝑤
𝒑
g = 𝒌 −𝒘 (8)
𝒘

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 11

 Classical Growth Theory of Adam Smith
From Eq. (8): ➢Although p is said to be important but g
g=
𝒑𝒌 −𝒘 does not necessarily depend on p. If w> p,
𝒘 g will not happen.
➢The growth rate of output (g) is positively ➢With the same p, a fixed g can occur if k
related to labor productivity (p) and the increases. Any increase in w or failure to
share of the previous year’s output given maintain k will result in a stagnant
to labor (k). economy.
➢g is negatively related to thereal wage
rate (w).
➢Growth will occur if the value of p > w,
means that productive labor is important
to growth.
➢k or wage fund is also important in
determining the growth rate, the higher
the k, the higher the rate of g.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 12

 Classical Growth Theory of Adam Smith
𝑝
Relationship between productivity ratio and 2. The lower the value of the higher the
w and share of productive labor 𝑤
value of k required to achieve the growth
1. The relationship between the ratio of p rate.
with w and the share of k is key to ▪ Since (1-k) is the initial share of output
economic growth. received by the capitalist, then in order
𝑝 for economic growth to continue, a larger
▪ For each level of there will be a
𝑤 k is needed, and the capitalist’s profits will
minimum level k to allow economic
growth to take place. decreased.
𝑝
▪ If the average productivity of labor is ▪ If can be increased through labor
𝑝 𝑤
twice than the real wage rate or = 2, specialization, then the value of k required
𝑤 for growth to occur will be lower.
then the economy must devote something
more than half of its output for
employment of ‘productive’ labor or the
1
value of k must be greater than for the
2
economy to grow.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 13

 Classical Growth Theory of Adam Smith
Criticism
1. Smith does not explain what is the
determinant for k to enable economic
growth to take place continuously - it is
difficult to determine the appropriate
value of k because it is given to labor at
the beginning of a production operation.
2. The difference
ABC CO. between productive and GHI CO. MNO LTD.
unproductive labor with the part k that
It is the leader in tech and can
bring more revenue for us
It has big spending budget and
can improve our sales
It has many affiliated entities to
refer our business too
should be given to both types of labor is
also not clearly explained-labor
productivity is different so the value of k
should also be different.
3. Smith fails to take into account the role
of fixed capital - machines or other fixed
capital can also increase/influence
𝑝
productivity and determine
𝑤

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 14

 Classical Growth Theory of David Ricardo
Introduction ▪ The wage fund criteria in Adam Smith’s
▪ The difference between economic theory also plays an important role in
activities that use land as input and those Ricardo’s growth theory.
that do not use it distinguishes Ricardo’s ▪ According to Ricardo, these criteria need
theory from Adam Smith’s idea of to be considered. Why?
productive and unproductive labor.
➢ labor uses products/commodities
▪ According to Ricardo, most consumer produced using land as input - land
goods are produced by the agricultural supply is limited and subject to
sector (land factor). diminishing return.
▪ The supply (SS) of land factor is limited
and subject to the Law of Diminishing
Returns (LDR) or the law of Diminishing
Marginal Productivity
➢ LDR - fall in additional output due to an
increase in the amount of input over a
fixed size of land.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 15
 Classical Growth Theory of David Ricardo
Introduction
Ricardo's major contributions to the analysis
of economic growth:
1. The process of economic growth is
terminal (not likely to continue forever) -
when the economy has reached a
certain level of growth, subsequent
growth will cease) - stationary state level
GHI CO.essentially different: depending
2. Income ABC CO.
distribution is related and
It is the leader in tech and can
determined by the process of economic
bring more revenue for us
➢ Production output depends on several
factors - land supply, capital stocks, labor,
and agricultural technology.
“….in different stages of society, the
proportions of the whole produce of the
earth which will be allotted…under the
names of rent, profits and wages, will be
on the
MNO LTD.
actual fertility of the soil, on the
It has big spending budget and It has many affiliated entities to
accumulation of capital and population,
can improve our sales refer our business too

growth. and on the skill, ingenuity and instruments

employed in agriculture….”
➢ The distribution of the share of the rent,
profits, and wages accrued to landlords,
capitalists, and laborers is not
determined randomly but has a unique
relationship with the stages of growth of
an economy.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 16

 Classical Growth Theory of David Ricardo
Assumptions
1. The economy consists of 2 sectors -
agriculture & manufacturing
➢ Both of these sectors produce consumer
goods.
➢ The agricultural sector has two
characteristics
i. produce commodities used by labor (i.e.,
corn) - wage good.
ii. using land as production input - the scale
of agricultural output is functional, inter
alia (among other things) on the amount
of land used in production.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS
2. Wage fund is paid to labor in each
production period
➢ as advances (similar to Smith’s theory) -
production takes time and labor does not
have a product produced.
3. The real wage rate (real wage) is equal to
the subsistence wage rate
▪ Any divergence between real wages and
subsistence wages will lead to an
equilibrium adjustment in the labor supply
➢ if real wages > subsistence wages, labor
supply will increase which in turn will lead
to a decrease in real wages.
17
 Classical Growth Theory of David Ricardo
Assumptions
4. Land (an important input in the
production of wage goods) has two
properties
➢ fixed supply
➢ different qualities - different fertility and
affect production productivity. This
criterion will lead to a declining return in
the production of wage goods of the
agricultural sector.
▪ When a certain amount of capital and
labor is added to the land, the marginal
and average output of the land will
decrease in line with the increase in the
scale of output.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS
▪ Competition creates two things:
➢ Increased food demand, resulted in not
only fertile land but also inferior land to
be used for production.
➢ Land productivity through the additional
amount of corn produced by hiring
additional units of labor and capital on
marginal land will decline.
▪ limited fertile land will cause production
costs to increase as agricultural output
increases.
18
 Classical Growth Theory of David Ricardo
Assumptions
5. Agricultural output is homogeneous
▪ The price of corn is equal to the cost of
production in labor units in marginal land
compared to the cost of corn produced in
more fertile land.
6. No fixed capital is required for production
and the economy is closed.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS
According to Ricardo:
▪ There is a two-way relationship between
labor, capital, and food production. How?
➢ The ability of labor to produce a surplus
will encourage capitalists to reinvest part
of the surplus for the purpose of profit by
adding more labor.
➢ The recruitment of more labor (especially
in agriculture) allows the sector to
produce more food and secure the
livelihood of the population.
19
 Classical Growth Theory of David Ricardo
Based on Figure 2.1
▪ The return to the factor of production will
Marginal product (MP), Average product (AP), Wage rate (W)

vary based on the level of labor

consumption to the land
MPL = marginal product of labor T
R1
APL = average product of labor R2
P1
W = labor wage
P2
▪ The segments LW, WP, and PR show the W1 W2 A
share of wages, profits, and rents for labor W
use at positions L1 , L2 and L3 .
▪ Ricardo's main contribution - the behavior APL
MPL
of the distribution of the share of output is
determined by the real factors in the
economic system, namely the amount and 0
L1 L2 L3 Labour (L)
quality of land; agricultural technology; and
growth in population. Figure 2.1 Return to Production Factors and the Economic Growth
Process of the Ricardo Model

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 20

 Classical Growth Theory of David Ricardo
Based on Figure 2.1
Marginal product (MP), Average product (AP), Wage rate (W)
At the L1 labor level:
▪ OL1 W1 W = total wages received by the
laborer
T
▪ WW1 P1 T = capitalist profit R1
R2
▪ TP1 R1 = rent to landlord P1

P2
At the L2 labor level:
W1 W2 A
▪ OL2 W2 W = the amount of wages received W

by the labors
AP
▪ WW2 P2 T = capitalist profit MP

▪ TP2 R 2 = rent to landlord

0
L1
▪ At L2 > L1 the total profit decreases L2 L3 Labour (L)

compared to the rent. Why?

Figure 2.1 Return to Production Factors and the Economic Growth
Process of the Ricardo Model

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 21

 Classical Growth Theory of David Ricardo
Based on Figure 2.1
Marginal product (MP), Average product (AP), Wage rate (W)
▪ Notice, the amount of profit is decreasing,
but the amount of rent is increasing.
▪ At point A, MP = W, the labor recruitment
T
process will stop - no more profits, no R1
reinvestment by capitalist and economic P1 R2
growth will stop. Why?
P2
▪ At this level too, there is no surplus of W1 W2 A
profit, and no reinvestment then the W

process of economic growth will stop.

AP
MP

0
L1 L2 L3 Labour (L)

Figure 2.1 Return to Production Factors and the Economic Growth

Process of the Ricardo Model

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 22

 Classical Growth Theory of David Ricardo

Criticism of the Ricardo Model

▪ Ricardo's view that the process of
economic growth will stop when all land is
used up is criticized from 2 aspects,
i. Does not take into account other
sources of savings owned by producers
(capitalists). Why?
ii. Not taking into consideration the impact
of technological advances in
maintaining profits and increasing
production volumes.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 23

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 24
 New Classical Growth Theory of Harrod-Domar
Introduction Harrod-Domar Growth Model
▪ The theory of simple economic growth ▪ A functional economic relationship in
processes (at the macro level) produced by which the growth rate of gross domestic
Sir Roy F. Harrod and Evsey Domar is within product (g) depends directly on the
a Keynesian framework. national net savings rate (s) and inversely
▪ This model describes the economic on the national capital-output ratio (k),
𝒔
mechanismABC byCO.
which more investment (I) GHI CO.
that is, g = (Todaro & Smith, 2020)
MNO LTD.
𝒌
will drive more growth (g).
It is the leader in tech and can It has big spending budget and It has many affiliated entities to
bring more revenue for us can improve our sales refer our business too

▪ Also known as the AK model. Why? Assumptions

Because it is based on a linear production
function with output given by the capital ▪ There is a direct relationship between the
stock, K times a constant, often labeled A. size of total capital stock (K) and total GDP
(Y)-known as the capital-output ratio.
▪ Capital-output ratio - a ratio that shows
the units of capital required to produced a
unit of output over a given period of time.
EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 25
 New Classical Growth Theory of Harrod-Domar
▪ For example - if $3 of capital is required to i. Net saving (S) is some proportion, s, of national
produce $1 GDP - means that any net addition income (Y)
to the capital stock in the form of new S = sY (1)
investment, I will result in a corresponding
increases in the flow of national output, GDP. ii. Net investment (I) is defined as the change in
the capital stock, K and can be represented by
▪ Suppose that this relationship (known as the ∆K such that
capital-output ratio) is 3 to 1. If the capital-
output ratio is defined as k and assume that I = ∆K (2)
the net savings ratio, s is a fixed proportion to since the total capital stock, K, bears a direct
national output (e.g. 6%) and that total relationship to the total national income, Y, (as
investment, I is determined by the level of total expressed by the capital-output ratio, k, it
savings, then we can construct the following follows that
simple model of economic growth. 𝐾
=k
𝑌
∆𝐾
=k
∆𝑌
Or finally,
∆K = k∆Y (3)
1
is a measure of efficiency of capital utilization
𝑘

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 26

 New Classical Growth Theory of Harrod-Domar
iii. Finally, because net national savings, S, must ▪ Dividing both sides of equation 6, first by Y and
equal net investment, I, we can write this then by k, we obtain
equality as 𝑠𝑌 1 𝑘∆𝑌 1
=
S=I (4) 𝑌 𝑘 𝑘 𝑌
∆𝑌 𝑠
▪ But from equation 1, we know that S = sY, and = (7)
𝑌 𝑘
from equation 2 and 3, we knows that ▪ Equation 7, which is a simplified version of the
I = ∆K = k∆Y famous equation in the Harrod-Domar theory
of economic growth, states simply that the
▪ It therefore follows that we can write the rate of growth of GDP(∆Y/Y) is determined
“identity” of saving equaling investment shown jointly by the net national savings ratio, s, and
by equation 4 as the national capital-output ratio, k.
S = sY = k∆Y = ∆K = I (5) ▪ The growth rate of national income will be
Or simply as directly or positively related to the savings
ratio (i.e., the more an economy is able to
sY = k∆Y (6) save, and invest, out of a given GDP, the
greater the growth of the GDP) and inversely
or negatively related to the economy’s capital-
output ratio (i.e., the higher k is, the lower the
rate of GDP growth will be).

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 27

 New Classical Growth Theory of Harrod-Domar
▪ Equation 7 is also often expressed in terms
of gross savings, 𝑠 𝐺 , in which case the
growth rate is given by
∆𝑌 𝑠𝐺
= -δ 7a
𝑌 𝑘
Where δ is the rate of capital depreciation.

The Growth Economic Logic

▪ From equation 7 & 7a, the economic logic
of growth is very simple. To grow,
economies must save and invest a certain
proportion of their GDP. The more they
can save and invest, the faster they can
grow.

EPPE3043_SET 3_THEORIES OF ECONOMIC GROWTH_SEM.1 SESSION 2023-2024_NS 28