Answer to Question #271684 in Macroeconomics for mimy

Question

Discuss the various stages of economic development                                                            (5 marks)

Answer 1

Traditional Culture:

Modern science and technology are either unavailable or not used in a systematic manner in traditional societies.

Domestic and international trade compositions might change. Traditional civilisation, on the other hand, is distinguished by the fact that there is a limit to the amount of per capita productivity that may be accomplished.

The Pre-conditions for Take-Off: The pre-conditions for take-off are established over a century or more.Construction of various economic and social overheads such as rail-roads and educational institutions, as well as the development of a centralized tax system and banking institutions.

The "Take Off" Time: This is a critical period of two or three decades during which the economy transforms itself in such a way that economic development follows almost inevitably.

'Maturity Drive: Of course, this is a protracted period of self-generating and self-propelled economic expansion.' Savings and investment rates are so high that economic expansion is virtually automatic.

The Age of High Mass Consumption: The age of high mass consumption refers to a period of current comfort given by many Western nations, during which consumers focus on durable commodities and forget about subsistence problems of prior phases. This shift in mindset is described by Rostow using the Buddenbrooks dynamics metaphor.