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GROWTH AND DEVELOPMENT IN A HARRODIAN ECONOMY: WITH EVIDENCE FROM CHINA
Author(s) -
Gang Gong
Publication year - 2013
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2012.04166.x
Subject(s) - economics , construct (python library) , china , growth model , wage , mechanism (biology) , government (linguistics) , phenomenon , process (computing) , macroeconomics , economy , keynesian economics , market economy , computer science , political science , philosophy , linguistics , physics , epistemology , quantum mechanics , programming language , operating system , law
In this paper, we construct a macrodynamic model that expresses the growth and development process in a less developed economy. The model introduces price, wage and government policy into an otherwise Harrodian economy. We find that these components can be regarded as stabilization mechanisms to overcome the destabilization mechanism in the original Harrod model and therefore the instability puzzles can be resolved. Using the evidence from China, we will show that the model can explore some important phenomenon with regard to growth and development in a less developed economy.