Hiedelyn I.

Llano ECO 4112-5

BS Accountancy 1-5 Prof. Julia N. Peralta

ECONOMIC GROWTH AND DEVELOPMENT THEORIES

( Group 3 Reflection paper )

The Group 3 report is about the Economic Growth and Development so obviosly it will focus on
how the economy will grow and expand and it feels like an interesting topic since our country needs to
bounce back since the pandemic outbreak, our economy fell down and still trying to grow. So the group 3
report has a four topics to be tackle.

Group 3 began their presentation by presenting Japan as a first-world country, whereas the
United Nations established the Human Development Index (HDI) as a statistical meter to assess the
economic and social growth of countries worldwide. They stated that Japan's HDI was 0.919 points,
putting it in 19th place out of 189 countries in 2019. Japan will similarly have a literacy rate of 99 percent
in 2020. They also examined Japan's industrialization, which is the shift of an economy from one that is
largely agrarian to one that is based on the production of goods. Discipline is imparted in Japanese
youngsters from an early age. Since teaching a child to act in a certain way gets more difficult as they
grow older, the Japanese believe that children should be disciplined and taught discipline and etiquette
from a young age. Every move a parent performs has an effect on how their children are raised and
disciplined. and that was some of the information I gathered for their report; however, I'm not an anime
lover, so I'm not very interested in the subject, especially because Japanese cuisine isn't on my list of
favorite foods, but I like their effort to transport us to Japan in a fictitious vision.

The initial subtopics were the linear phases hypothesis and growth as development. The first
hypothesis looked into was the linear phases theory, which emphasizes the need of rapid capital
accumulation in economic growth. Rostow's Stages of Economic Growth has five stages: traditional
society, dominated by agriculture and barter exchange; pre-take-off stage, development of education and
understanding of science; take-off, organized systems of production; drive to maturity, movement toward
a diverse economy; and stage of mass consumption/age of high mass consumption, where rewards are
more evenly distributed. The third theory is the Harrod-Domar Growth Model, which describes how
economic growth is calculated as a function of capital output and individual savings rates. To determine
long-term economic growth rates, most economists utilize the Harrod-Domar hypothesis. In this case, the
national income growth rate can be calculated using the formula S divided by C. The savings-to-income
ratio in the country is S, while the marginal capital-output ratio is C. There were a few other situations to
consider as well.

The second sub topic is Structural-Change Models, which I learned are fundamental changes in
the way a market or economy works or operates. As a result, structural-change theory focuses on how
developing countries move from a significant reliance on traditional subsistence agriculture to a more
modern, urbanized, and industrially diverse manufacturing and service economy. It uses neoclassical
price and resource allocation theory, as well as modern econometrics, to explain how this change occurs.
So, to demonstrate the structural change model, We have the Lewis model, which was created by Nobel
Laureate W. Arthur Lewis and is applicable in surplus labor emerging countries around the world, such as
China. The two-sector surplus labor model, as the name implies, considers two sectors in an
underdeveloped economy: an overcrowded rural agricultural sector with marginal labor productivity
equal to zero-this is because agriculture generally under employs workers, and removing the excess
supply of labor will not result in a loss of output. Excess labor migrates from a highly urbanized,
industrial manufacturing and service sector. Lewis expects job growth in the urbanized sector to absorb
the extra employees displaced from the rural subsistence economy in this model. Another is Hollis B.
Chenery and his coauthors' Patterns of Development Analysis, which defined structural change as the
process by which an underdeveloped economy's economic, industrial, and institutional structure is
transformed over time to allow new industries to replace the traditional economy as the engine of
economic growth. In contrast to the Lewis model and the basic stages of development, greater savings
and investment, while required, are insufficient for economic progress.

The third sub topic is the International-Dependency Revolution, whichthey stated that this has
models that regard developing countries as threatened by local and international political, institutional,
and economic rigidities, and caught up in a dependency and dominance relationship with affluent
countries. Moreover, it gained considerable popularity during the 1970s, particularly among intellectuals
from underdeveloped countries. As a result, they determine reliance and domination. As a result, reliance
implies that emerging countries seek assistance from developed-country economic policies in order to
recover their own growth. While dominance refers to a condition in which industrialized countries have
far more power and influence than developing countries. The international-dependency revolution has
three major streams of thought, which are the neocoloial dependency model, which is an indirect rowth of
marxism thinking, and underdevelopment, which exists in developing countries as a result of former
colonial rulers' continuing unequal economic, political, and cultural policies toward less developed
countries. Following that is the false-paradigm model, which is the second and less radical international-
dependence approach to development. Leading university intellectuals, trade unionists, high-level
government economists, and other civil servants all receive their education in developed-country
institutions, where they are unwittingly served an unhealthy dose of alien concepts and elegant but
inapplicable theoretical models. The final one is the dualistic-development thesis, which asserts the
existence and continuation of significant, if not growing, disparities between rich and poor nations and
affluent and poor peoples on many levels. There are also four key arguments that I learned on their
discussion which is that the Traditional Concept of Dualism embraces, which are as follows: 1. In a given
space, different sets of conditions, some "better" and others "inferior," can coexist. 2. This coexistence is
long-term, not just transitory. 3. The degrees of superiority or inferiority do not only show no symptoms
of lessening, but have an inbuilt tendency to increase. 4. The superior and inferior components'
interrelationships are such that the existence of the superior elements accomplishes little or nothing to pull
up the inferior element, let alone "trickle-down" to it.

The fourth and last topic is the Neoclassical Counterrevolution. As a result, they indicated in
their reporting that the 1980s saw a comeback of neoclassical free-market orientation toward development
problems and strategies, as opposed to the interventionist dependency revolution of the 1970s. As a result,
there is a Neoclassical counterrevolution in both industrialized and developing countries. This
counterrevolution in industrialized countries embraced supply-side macroeconomic policies, rational
expectations theories, and the privatization of public businesses. In developing countries, it advocated for
freer markets as well as the elimination of public ownership, statist planning, and government regulation
of economic activities.

To sum up, I feel that comprehending these ideas is crucial since it gives a foundation for
economic study in many fields based on good theoretical reasoning and mathematical problems. It's also
beneficial for formulating government policies because they know how to increase efficiency in today's
society. It helps us make important decisions. Overall, I thought the report to be quite useful, and I gained
a lot of knowledge from it.