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DEFINITIONS OF ECONOMIC GROWTH
Economic growth is both the most prominent and a vast field of study. Samuelson and Nordhaus (2001:568), for example, write in their best-selling textbook: “Economic growth is the single most important factor in the economic success of nations in the long term.” Its genesis may be associated with the classical school, which in fact produced two fundamentally different approaches Smith’s growth optimism and Malthus and Ricardo’s growth pessimism. With modifications, both theoretical strands are still encountered today.
A distinction is usually made between economic growth and economic development. Economic growth refers to the sustained increase in per capita or total income, while the term “economic development” implies sustained structural changes, including all the complex effects of economic growth. The two processes are usually intimately linked but the terms are not synonyms. Sir
John Hicks made it clear that “growth economics” has nothing to do with the problem of developing the underdeveloped. According to Hicks (1965: 3-4), “underdevelopment economics is a vastly important subject, but it is not a formal or theoretical subject”. He cast doubt on the connection between growth theory and economic development by observing “the appearance of a branch of theory called Growth Theory, at a time when the economics of underdevelopment has been a major preoccupation of economists, has made it look as if there must be a real connection”. Hahn and Mathews (1964:804) agree with this approach and write “Growth theory is applicable only to the advanced sector whereas the problem of the backward sector must be regarded as part of the theory of development rather than the theory of growth”. Choi (1983:8) observed that “if the linguistic usage is to be precise, Walter Rostow’s well-known The Stages of Economic Growth certainly ought to be titled The Stages of Economic Development”.
There are many definitions of economic growth. They differ mainly because of shifts in emphasis or the inclusion or exclusion of certain aspects of the process. The core ingredient of most definitions is the annual rate of increase in gross domestic product in constant values from one year to the next, or over a number of years.
Gross domestic product (GDP) gives the total market value of final goods and services produced in the economy in any one year. The purpose of the measure is to determine the increasing ability of a nation to satisfy the material wants of its people by measuring the rate at which the volume of real goods and services expands over a period of time.
1. INTRODUCTION
1.1 Introduction and background
1.2 Definitions of economic growth
1.3 Growth theory
1.4 Conclusion
1.5 Outline of the study
2. SOME SEMINAL CONTRIBUTIONS TO ECONOMIC GROWTH
2.1 Introduction
2.2 Classical foundatios of economic growth
2.3 The classical school: the optimists
2.4 The classical school: the pessimists
2.5 The conclusion of the classical school
2.6 The untestables
2.7 Neoclassical hiatus
2.8 The exceptions
2.9 Conclusion
3. EXOGENOUS AND ENDOGENOUS GROWTH
3.1 Introduction
3.2 Kaldor’s stylised fact
3.3 Stylised facts used by other researchers
3.4 Conclusions regarding stylised facts
3.5 Exogenous growt
3.6 Growth accounting
3.7 Endogenous growth theory
3.8 Conclusions
4. SOUTH AFRICA’S GROWTH PERFORMANCE 1960 – 2001
4.1 Introduction
4.2 The growth concept, population growth and welfare
4.3 Income distribution in South Africa compared with other countries
4.4 South Africa’s growth record over the decades
4.5 The institutional environment
4.6 The outward orientation of the South African economy
4.7 Investment and economic growth
4.8 Prognosis
4.9 Policy options for sustained high economic growth
4.10 Conclusion
5. FACTORS INFLUENCING GROWTH: AN INTERNATIONAL
PERSPECTIVE
5.1 Introduction
5.2 Literature review sector as a source of growth
5.3 Synopsis of factors to consider when designing policies for faster growth
5.4 Conclusion
6. GROWTH DETERMINANTS IN SOUTH AFRICA
6.1 Introduction
6.2 The data
6.4 Empirical results
7. SUMMARY AND CONCLUSION
7.1 Introduction
7.2 Findings of the study and policy recommendations
7.3 Prognosis
REFERENCES
APPENDIX
