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The theory is generally associated with Hirschman. He presented a complete theoretical formulation of the strategy. Underdeveloped countries display common characteristics: low levels of GNI per capita and slow GNI per capita growth, large income inequalities and widespread poverty, low levels of productivity, great dependence on agriculture, a backward industrial structure, a high proportion ...
A meta-analysis of 67 empirical studies finds that financial development is robustly associated with economic growth. [5] Countries with better-developed financial systems tend to enjoy a sustained period of growth, and studies confirm the causal link between the two: financial development is not simply a result of economic growth; it is also ...
Hence, underdeveloped economies should aim to raise their productivity levels in all sectors of the economy, in particular agriculture and industry. [3] The process of how increased productivity leads to economic development and growth. For example, in most underdeveloped economies, the technology used to carry out agricultural activities is ...
Population aging is a global phenomenon, but population age has risen more slowly in developing countries. [19] Development aid or development cooperation is financial aid given by foreign governments and other agencies to support developing countries' economic, environmental, social, and political development.
Fei–Ranis model of economic growth has been criticized on multiple grounds, although if the model is accepted, then it will have a significant theoretical and policy implications on the underdeveloped countries' efforts towards development and on the persisting controversial statements regarding the balanced vs. unbalanced growth debate. [8]
The IMF and the World Bank supported stock market development not solely on the grounds of ideology but rather that the stock market is a natural outgrowth of a developing financial sector as long-term economic growth proceeds and also as a criticism of early development efforts through Development Finance Institutes (DFI). [5]
The association between economic growth and financial deepening has been a wide-ranging subject of experiential research. The practical evidence suggests that there is a significant positive relationship between financial development and economic growth. [4] [5] Many economists support the theory that financial development spurs economic growth.
In the development of economic theory, the distribution of income was considered to be between labor and the owners of land and capital. [44] In recent decades there have been several Asian countries with high rates of economic growth driven by capital investment. [45] The work week declined considerably over the 19th century.