SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
5
ECONOMIC GROWTH
Abdukhalilova Sabohat Naimovna
Tashkent State University of Economics
Associate Professor of the Department of Economic Theory
https://doi.org/10.5281/zenodo.15613615
Abstract.
This process by which a nation’s wealth increases over time.
Although
the
term
is
often
used
in
discussions
of
short-
term economic performance, in the context of economic theory it generally
refers to an increase in wealth over an extended period.
Key words
. Growth, transformation, maturity, Entrepreneurship
Growth can best be described as a process of transformation. Whether one
examines an economy that is already modern and industrialized or an economy
at an earlier stage of development, one finds that the process of growth is
uneven and unbalanced. Economic historians have attempted to develop a
theory of stages through which each economy must pass as it grows. Early
writers, given to metaphor, often stressed the resemblance between the
evolutionary character of economic development and human life—e.g., growth,
maturity, and decadence. Later writers, such as the Australian economist Colin
Clark, have stressed the dominance of different sectors of an economy at
different stages of its development and modernization. For Clark, development
is a process of successive domination by primary (agriculture), secondary
(manufacturing), and tertiary (trade and service) production. For the American
economist W.W. Rostow, growth proceeds from a traditional society to a
transitional one (in which the foundations for growth are developed), to the
“take-off” society (in which development accelerates), to the mature society.
Various theories have been advanced to explain the movement from one stage to
the next. Entrepreneurship and investment are the two factors most often
singled out as critical.
Economic growth is usually distinguished from economic development, the
latter term being restricted to economies that are close to the subsistence level.
The term economic growth is applied to economies already experiencing rising
per capita incomes. In Rostow’s phraseology economic growth begins
somewhere between the stage of take-off and the stage of maturity; or in Clark’s
terms, between the stage dominated by primary and the stage dominated by
secondary production. The most striking aspect in such development is
generally the enormous decrease in the proportion of the labour force employed
in agriculture. There are other aspects of growth. The decline in agriculture and
the rise of industry and services has led to concentration of the population in
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
6
cities, first in what has come to be described as the “core city” and later in the
suburbs. In earlier years public utility investment (including investment in
transportation) was more important than manufacturing investment, but in the
course of growth this relationship was reversed. There has also been a rise in
the importance of durable consumer goods in total output. In the U.S.
experience, the rate of growth of capital goods production at first exceeded the
rate of growth of total output, but later this too was reversed. Likewise, business
construction or plant expenditures loomed large in the earlier period as an
object of business investment compared to the recent era. Whether other
countries will go through the same experience at similar stages in their growth
remains to be seen.
Comparative growth rates for a group of developed countries show how
uneven the process of growth can be. Partly this unevenness reflects the
extraordinary nature of the 1913–50 period, which included two major wars
and a severe and prolonged depression. There are sizable differences, however,
in the growth rates of the various countries as between the 1870–1913 and
1950–73 periods and the period since 1973. For the most part, these differences
indicate an acceleration in rates of growth from the first to the second period
and a marked slowdown in growth rates from the second to the current period.
Many writers have attributed this to the more rapid growth of business
investment during the middle of the three periods.
The relatively high rates of growth for West Germany, Japan, and Italy in the
post-World War II period have stimulated a good deal of discussion. It is often
argued that “late starters” can grow faster because they can borrow
advanced technology from the early starters. In this way they leapfrog some of
the stages of development that the early starters were forced to move through.
This argument is nothing more than the assertion that late starters will grow
rapidly during the period when they are modernizing. Italy did not succeed in
growing rapidly and thereby modernizing until after World War II. Together
with Japan and Germany it also experienced a large amount of war damage. This
has an effect similar to starting late, since recovery from war entails building a
stock of capital that will, other things being equal, emdiv the most advanced
technology and therefore be more productive and allow faster growth. The other
part of this argument is the assertion that early starters are actually deterred
from introducing on a broad front the new technology they themselves have
developed. For example, firms in a country that industrialized early may be
inhibited from introducing a more modern and efficient means of transportation
SOLUTION OF SOCIAL PROBLEMS IN
MANAGEMENT AND ECONOMY
International scientific-online conference
7
on a broad scale because there is no guarantee that other firms handling the
ancillary loading and unloading tasks will also modernize to make the change
profitable.
Related to this is the problem of whether or not per capita income levels
and their rates of growth in developed economies will eventually converge or
diverge. For example, as per capita incomes of fast growers like the Italians and
Japanese approach those of economies that developed earlier, such as the
American and British, will the growth rates of the former slow down?
Economists who answer in the affirmative stress the similarities in the changing
patterns of demand as per capita income rises. This emphasis in turn implies
that there is less and less chance to borrow technology from the industrial
leaders as the income levels of the late starters approach those of the more
affluent. Moreover, rising per capita incomes in an affluent society usually are
accompanied by a shift in demand toward services. Therefore, so this argument
goes, differences in income levels and growth rates between countries should
eventually narrow because of the low growth in productivity in the service
sector. The evidence is inconclusive. On the one hand, growth is a function of
something more than the ability to borrow the latest technology; on the other
hand, it is not clear that productivity must always grow at a slower rate in the
service industries.
A rapidly increasing population is not clearly either an advantage or a
disadvantage to economic growth. The American Simon Kuznets and other
investigators have found little association between rates of population
growth and rates of growth of GNP per capita. Some of the fastest growing
economies have been those with stable populations. And in the United States,
where the rate of growth of population has shown a downward historical trend,
the rate of growth of GNP per capita has increased over the last century and a
half. Another finding by Kuznets is that while GNP per capita in 1960 was
substantially higher in the United States than in any European country, there
was no significant difference in the per capita growth rates of all these countries
over the period 1840 to 1960 as a whole. The conclusion is that the United
States started from a higher per capita base; this may have been the result of its
superior natural resources, especially its fertile agricultural land.
Literatures:
1.
Gryaznova A.G. Economic theory / A.G.Gryaznova, N.N.Dumnaya, A.Yu.
Yudanov. - M.: Yurait, 2014. - 592 p.
2.
Vasilyeva E.V. Economic Theory: Lecture Notes / E.V.Vasilieva, T.V.
Makeeva. - M .: Yurait, 2018 .-- 191 p.
