Answer to Question #260528 in Macroeconomics for Precilla

Question

Explain the horrad donor growth model and provide a discussion indicating if the theory will be applicable in developing countries like South Africa

Answer 1

Solution:

The Harrod-Domar growth model is a Keynesian model of economic growth. The model stresses the importance of savings and investment as key determinants of growth.

The model can be applicable in South Africa where it can be used as an economic guide for planners. It can be utilized to calculate income, saving and investment targets which are vital in the planning of under-developed economy.