multi_page - POLICY RESEARCH WORKING PAPER L807 The Ghost...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: POLICY RESEARCH WORKING PAPER L807 The Ghost of Financing Gap The qhost of a nq-dead arowth model still haunts aid How the Harrod-Domar to developing countries. Growth Model Still Haunts Development Economics William Easterly The World Bank Development Research Group August 1997 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized POLICY RESEARCH WORKING PAPER 1807 Summary findings The Harrod-Domar growth model supposedly died long Easterly traces the intellectual history of how a long- ago. But for more than 40 years, economists working on dead model came to Influence today's aid allocation to developing countries have applied - and still apply developing countries. the Harrod-Domar model to calculate short-run He asks whether the model's surprising afterlife is investment requirements for a target growth rate. attributable to consistency with the 40 years of data that They then calculate a financing gap between the have accumulated during its use. required investment and available resources and often fill The answer is no." the "financing gap" with foreign aid. This paper - a product of the Development Research Group - is part of a larger effort in the group to study the determinants of economic growth. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Kari Labrie, room N 11-055, telephone 202-473-1001, fax 202-522-3518, Internet address [email protected] August 1997. (30 pages) The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Produced by the Policy Research Disse-mination Center The Ghost of Financing Gap How the Harrod-Domar Growth Model Still Haunts Development Economics by William Easterly' Vieews expressed here are not to be taken as those of the World Bank. I am grateful to John Adelman, Nicholas Carter, Norman Hicks, and John Holsen for sharing their reminiscences about modelling in the World Bank. I am also very grateful for comments from Jorge Araujo, Nicholas Carter, Cevdet Denizer, Hinh Dinh, Richard Eckaus, Norman Hicks, Aart Kraay, Ross Levine, Raj Nallari, Guy Pfeffermann, Jacques Polak, Lant Pritchett, Dani Rodrik, Jakob Svensson, Jos Verbeek, and to the participants in a World Bank seminar, while absolving one and all of responsibility for any errors. 2 In April 1946, Evsey Domar published an article on economic growth called "Capital Expansion, Rate of Growth, and Employment." This article did not discuss Expansion, Rate of Growth, and Employment....
View Full Document

This note was uploaded on 03/25/2010 for the course ECO 512 taught by Professor Johnson during the Spring '10 term at The School of the Art Institute of Chicago.

Page1 / 40

multi_page - POLICY RESEARCH WORKING PAPER L807 The Ghost...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online