Econ revision notes while Stud

Course ECO 331

Created @December 15, 2021 1:43 PM

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Type Revision Notes

Leibenstein's theory
Critical minimum efforts theory
environment of inertia prevents the development variable from moving forward and
drags it backward.
Minimum effort is needed to overcome inertia

In other words, minimum effort is necessary to achieve steady secular growth for
raising per capita income in the long-run.

Every economy experiences 2 forces, shock and stimulants

Shocks refer to those forces which tend to reduce output, income, employment and
investment etc. Shocks dampen and depress the development forces and are called
‘income-depressing forces’.

On the other hand, stimulants refer to those forces which help raising the level of
income, output, employment, investment, etc. Stimulants impress and encourage
development forces and are called ‘income-generating forces’.

Shocks > Stimulants = Underdeveloped

Stimulants > Shocks = Developed

Theory explains struggle between shocks and stimulants

Critical effort is not necessary to be done in one stroke but in various timed smaller
efforts

Econ revision notes while Stud 1