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Multiple Choice Questions

Which growth model inspired the use of capital output ratio for development planning ........

Economic and social issues (RBI) Growth and development

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Which growth model inspired the use of capital-output ratio for development planning?

The Harrod-Domar model

Solow's model

Kaldor's model

Feldman's model

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Explanation:

The Harrod–Domar model is a Keynesian 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 of 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, although a similar model had been proposed by Gustav Cassel in 1924.The Harrod–Domar model was the precursor to the exogenous growth model.

Neoclassical economists claimed shortcomings in the Harrod–Domar model—in particular the instability of its solution—and, by the late 1950s, started an academic dialogue that led to the development of the Solow–Swan model.

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