MACROECONOMIC GROWTH MODELS IN A FAST CHANGING MORDERN ECONOMY

 MACROECONOMIC GROWTH MODELS IN A FAST CHANGING MORDERN

ECONOMY-1

Growth and development have been used interchangeably over the last century or so in various economic and academic discussion worldwide.They are normally used to draw a conclusion and a distinction over the rate of economic expansion at a particular period and similarly  being maneuvered in the measurement of considerable  changes experimented in the technical and the institutional  framework  with which it is produced .While growth implies both expansion  in input and output efficiency , development entails  massive structural changes in output and the level of sectoral allocation of output to fully boost sustainability of growth in the long run.The former connotes height or weights infusion and protrusion.,the latter relaxes  over growth in functioning capacity and the level of ideological and the material changes experimented and attained at a particular period.

However whether the economy looses capacity at an appreciable mass or not it can be similarly enthused that growth and development no matter what go together especially in the development transition .Contrary to Kindleberger economic growth does not translates into economic development most specifically at a point  when growth slows down .Therefore this requires understanding  perpertual growth cycle and growth durability for the mission of transition to be possible .At this point one is torn to shred and doubtful about the workability of existing macroeconomic models and the uniform pattern of these models has not for once being agreed upon .There is need to adopt the uniform patern by all modelers like the Newton principia that wrought magic and a foremost economic miracle since the dawn  of  mrdern age

In less developed countries , growth without development is possible and common. Anglo-Saxons or Germanic tribes or Caucasians during the dark ages have passed through this stage  so that development in this part of the world is 500 years backward so to say requiring similar level of institutional and ideological reforms experimented during the period.

Existing macroeconomic models besides ,what are the components and the criteria for the measurement of economic growth and development ?This answer cannot be provided in a jiffy unless the level of ideological freedom supplanting them exist within same modeling and rationalistic prejudice that ordinarily  supports the nature of growth and development at a particular period .Alteration implies changes in the nature of growth over time .

Majority of these modelers are at best capitalist agents and free market apologists 

I take Karl Marx as an exception and his stage theories

National income or an  average income is often used as more appropriate benchmark to measure economic growth and development .As a central component and criteria for measurement of national GDP.or GNP,it can also be calculated on per capital basis ,per member of labour force  or based on hourly wage.To measure consumption ,income per head of population is most appropriate concept     but if we are interested to measure production , income per head is used while income per man hour of input is used to measure the efficiency of the economy .

Above all percapital income truly speaking according to conventional knowledge and economic textbook represents the level of economic development at a particular period.Statistics on population increase are highly more distorted in developing nations than the data on national income Generally in economic development  parlance ,  national income is the numerator while population as the denominator are both humiliated by statistical  distortion of mordern era .The increase in the depravity of such institutional arts has not been relented nor moderated and statistical ambiguity  has become  a major clog in the wheel of economic growth .But for capitalist economies this predilection certainly will last for a while until better means of development cycle models are discovered the way Adam Smith did with The Wealth Of Nations published in 1776 especially  with the dawn of marsolist age

                    THE CONCEPTUAL  DISPARITY OF NATIONAL INCOME .

There had been disputations and intellectual bickerings betwen the communist bloc  and free market advocates over exactly what constitutes national income The marxists have used a rationale that excludes wide range of services to conclude on what national income means and heavily restricted its connotations to mere  martial changes in output .This however exclude issues such as government administration , ..............contd.

                                       ECONOMIC GROWTH JUXTAPOSED ECONOMIC DEVELOPMENT

Economic growth according to Kindle Berger is usually thought as unidimensional and is also measured by growth in income .Economic development measured by structural changes and functional transformation and where the latter is missing measurement component  swings in favour of income ,the levels of income and the rates of economic growth and development measured by income .

Based on modelers' perspective , a couple of  economic system and models were developed to catalyse economic development .We shall be heavily restricted to some of them in the vast academic world of macroeconomic landscape .The bullionists,the mercantilists ,the classical economics and neoclassical or neomercentalists, ,the marginalists ,the structuralists ,the keynesians and the  monetarists among others,The Ricardian growth model ,the Harrod-Domar growth model,the Kaldor model,the growth theories and the stage theories .We shed light a bit on their legacies and historical  pedigrees.

The bullionists,the mercentilists and the neomercentilists.like the physiocrats in France came before  the classical and the neoclassical Schools.On their legacies in the successive times came the  keynesian school and market Neoliberalism or monetarism that gained increasing popularity with the stagflation of the 70s

                                                          Growth Vs Stage theories

Growth theorists were more concerned about the influence of market forces on growth .With the emergence of marsolist theorists and the spring of Marsolithic ages ,far broader macroeconomic developent framework. Has evolved .Much of the effort of the growth theorists over time could be classified  as  preschool pedagogics--or scions of  the grand old master   and elementary old textbook economics outmoded by  changing necessity of the seasons and the reaction  of the sun .Only few economic policies and modeling are foolproof  and sacrosanct to the development of the market theories where development cycle is to be operated  on a moderate vision of boosting the economy .

.The early growth theories though still relevant  today in modern myths were specifically concerned with the implications of insufficient demand or insufficient supply halted over growth .In the previous article --Reviewing Monetarism and Contravening Inflation Adjusted Monetary Policies. ‘the author noted with the invention of money ,supply was initiated but prior to the  invention demand was initiated as sub structural law of the market in contrast to supply as the super structural law of the market both stimulated by the market logics, laws of nature and mother nature respectively .The demand of the factors of production  brings out the invention of the money, the discovery , progress , productivity and the competitiveness of the market .It is the demand subject to a given metaphysical impulse of the market logics that brings out the invention and creation of supply .

The barter economies thrived  first on ideological  demand and material demand arose shortly after the institution of supply .Supply is a tangible evidence of material items that is also subject to material demand of the items once prices are fairly quickly ascertained. Economies falter first due lack of understanding of the nature of market logics and natural laws and also to some extent as market forces obtrude and intrude the welfare of these laws of nature and the boom and burst cycle intermittently evolved as bickering response gather momentum against the surging mismatch and structural imbalance between them .True growth theories and not fable should ordinarily evolve to bridge this lacuna and  demand  or market forces in general are not been truly influenced by what economists in general claim but as the market logics thinks and reacts at a particular period .

In the early growth theories Ricardo and Smith focused on supply and ignored demand and the equitable ability of all consumers to profit from consumption of supply .The focused on capital accumulation or savings needed to boost demand and therefore contribute to expansion of supply .

From Thomas Malthus to Marx and infact also  Keynes in the general theory of employment ,interest and money,this topic  has been expounded by them especially the Keynesian emphasis on Malthusian consideration of sustained demand Even in the face of Ricardo's land diminishing returns bogey growth developed fairly so quickly across western Europe and North America .

Consequently ,the exponential growth increased in the region was largely responsible for the neglect ascribed to growth .There were technological advances instituted by entrepreneurs that led to external economies of scale that boosted  volume of outputs. This was the basis of Joseph Schumpeter 's development theory .After the World War 2 ,economic growth became the centers of public priorities .It arose as a byproduct of revolutionary Keynesian income theory and the search for world market .For the first time ideological prejudice was buried in favour of human needs -the original influence factor ,drawing up the MARSHALL plan for the reconstruction of war torn Western European nations . What market forces cannot do given the magnitude or enormity of the situation that financial and moral recklessness. 

The fragility of market forces under questionable circumstances cannot be effectively  relied upon in times of crisis and wars as we ignorantly and unconsciously do with the market logics and the sanction able and credible laws of nature and mother nature. Why did the Roman authorities shortly after Rome collapse resort to or opted for barter trade ?The German inflation crisis of the 1920s could have been averted by the same method and a host of hyperinflationary episodes and tragedies of the modern age .In the  previous times growth was ignored but  in the latter times it was more important than market forces .If the laws of nature and market logics could manage crisis so much effectively well ,do we really need to survive on market forces ?

                         CONVENTIONAL DEFECTS AND STAGE THEORIES

Market logics or market rational forces can be much more effective in a free market than mere market forces .And as a matter of fact ,research discoveries by marsolism have shown that market rational forces can be effective building block for socialist free market in the same way in which market forces championed the direction of free market or neoliberal economy On the other hand, as more complex theories emerge to bridge the lacuna , the conventional defects of the growth theories by its fallibility proven as some sort of blessings was responsible and instrumental to this emergence .For instance the Ricardian growth model expounded in natural resources poverty dealt a great blow to the growth and growth modeling respectively  and was disputed and disproved by the United States ,the British Commonwealth and Western Europe in the findesicle .It commands a FINITE RELEVANCE today.

The Harrod Domar model opined that capital constitute the origin of growth Scholars and students have tested this relevance others  .For instance Madison among..................contd.The economic growth in the United States was catalysed by  structural inputs of labour and capital. Moses Abramovitz and Robert Solow provided strategic historical  evidences to back up the studiesA and had also been confirmed by successive studies . The limitation in the Ricardian growth model was basically inclined in the limitation imposed in the use of land The limitation of growth according to Harrod Domar was determined by the limitation of land from which food prices are also set and labour supply .The interaction between capital -output ratio and savings lead to growth with capital as the engine of growth ..  Planned savings and capital-output ratio maintains equilibrium growth path from which too much or too little demand can be controlled .

The modification of the Harod-Domar by Meade and Solow in the neoclassical direction assumed provision for substitution and not fixed proposition as assumed by Harrod Domar model and the technical to progress investment function noted by Kaldor .Various efforts according to KindleBerger by all statistical standard have been made to verify and  explain the reliability of these models .While they still left a considerable portion of historical growth unexplained ,the residual exposition that was offered included technical progress ,human capital investment ,growth in organizational efficiency ,increasing returns of scale ,government policies etc.

Nevertheless ,economic theories had also produced a considerable  growing proportion of stage theories competitively vying for recognition alongside rival growth theories .By the mid-60s ,Rostow's listing of traditional society ,preconditions ,take off ,drive to maturity ,high consumption mass seemed to be the most popular.

Walter Hoffman's theories  of stages which examines industrial production relationship between the consumer and capital goods was elevated into a law  of development ,having gathered some  uniformity of data infrequently from a given level of anti-theoretical prejudice .Colin Clark examination of relationship between primary goods-agriculture and secondary goods -manufacturing ,mining and construction and the tertiary sectors Classical division of labour was also examined and materials gathered for historical  testing.

Simon Kuznets-the pioneer of American national income statistics in the light of historical statistics gathered data in which he was familiar with.Rostow's facts have been interrogated by economists and historians alike specifically the inevitability of transitions between these stages .Alexander Geshenkron's differed from Rostow's .He disputed the relevance  of some of these stages across countries especially the backward countries with dominant government  not being private .driven.

 MARSOLISM:CHANGING WORLD MACROECONOMIC ORDER

All over the world , economic theories change and differ by pedigrees and depth  from time to time,and is also subject to the possible change in the  prevailing economic trends and apex needs of the volatile modern society .At this level the capability of the economy is increasingly threatened and challenged to buy the  kind of change it desires .Transformation begins at this level .Thousands of theories exist worldwide and each with its own peculiarity informed by changing necessity of times have sought at one point in time endeavoured to change and address fundamental economic problems of modern society to no avail.In this lacuna and debris that requires cleansing the Augean stable and proper sanitation and theoretical reorientation not as it were since Renaisance ,marsolism  as unique dose is oriented to further revolutionary movement as  unleashed by successive apex macroeconomic models .

There is no doubt that money is very important and a strong pillar of modern economy .Almost everyone agrees ,it is central to the utmost survival of modern civilization .The use of money and especially poor handling of  money politics has caused catastrophes and relentlessly economic storms with the rise and fall of the  ages .Several schools of thoughts have treated this never-ending  voluminous subjects and each new approach and model  unleashes new economic challenges .

Unlike monetarism, a prominent school of thought which maintains that money supply and rise and fall of money supply being the total amount of money in an economy  is the chief determinant of Current dollars GDP in the short run and changes in the price level in the long run .But we must be able  to identify the true  nature of money and classify them accordingly .It is debatable and arguable  whether normal money is reliable or not .But it is still yet to be proven or  determined given the profliferation of economic storms down the millennia. Infact ,it cannot  be relied upon a bit and the most reliable form of money being credit money has not been discovered and applied both in technology and usage .To be candid ,the two basic forms of money excluding equity money includes free money –money not borrowed and then credit money or borrowed money first discovered in ancient Egypt. And then paper money that came later with  emergence of either  Roman civilization and Chinese civilization  or thereabout translated into circulation through the exchange of paper or metal money .   

The latter is prominent in modern society or for the larger swathe of human history ever since money was first discovered .Marsolism treats money differently and that credit money it believes has a more stability effect   in the short run and a multiplier effect in the long run on the economic welfare of all social classes  than free money .It has lasting  impact on the generality of the economy .

Marsolism maintains that credit money as total amount of  loans in a debt economy tied to debt oriented output  is a reliable benchmark and central determinant of the  growth in GDP in the short run and is also extremely  influential   impact on credit and general price level in the long run .Therefore it uses a monetary credit policy