The Main Points to be discussed in this
Definition of both Economic growth and Economic
Benefits and Cost of economic growth.
Determinants of economic growth.
The Harrod - Domar growth model .
The Lewis Theory of D
DR. ZOHAIR A. YAMANI
The Lewis-Ranis-Fei (LRF) Model of Surplus Labor (LRF)
It is an economic development model and not an economic growth model. It is a
model taking the peculiar economic situation in developing countries into account:
Illusreation of the
The Aggregate Production Function
The Savings Function
Per Worker Basis
Net Investment Per Worker
Calculating the Growth Rate of GDP
Calculating the Growth Rate of GDP Per Capita
Study the behavior of the individual decision
making unit (Firms & Households) such as :
determination of price and output in an individual
market such as wh
Expansionary Monetary Policy
An increase in the Money Supply .
A. when SAMA increases money supply , new bank
reserves are created . The banking system uses
these reserves to increase the money supply.
B. as Money supply rises , interest rate falls, so
The Government Sector
Given the key role of the government sector as the sole
recipient and spender of oil revenue, and because of its
predominant size relative to the overall domestic
economy , the government economic decisions are
critical in determinin
Anlisis de Rentabilidad de la empresa
Citar como: Snchez Ballesta, Juan Pedro (2002): "Anlisis de Rentabilidad de la empresa", [en lnea]
5campus.com, Anlsis contable <http:/www.5campus.com/leccion/anarenta> [y aadir fecha consulta
Investing is forgoing consumption
now in order to have the ability to
consume more at a later date.
Present Value earlier money on a
Future Value later money on a time
Interest Rate exchange rate
DR. ZOHAIR A YAMANI
The Lewis Model
Two sectors in an economy, the traditional agricultural sector
and the modern manufacturing sector.
Surplus labor in agricultural sector - MPL is zero
Real wage in agricultural sector is based on APL.
the general increase
in the price level .
The Price Level
Refers to the average level of all
prices in the economy .
price level and inflation are
measured by an index number.
The most common index numbe
Harrod Domar Growth Model
S = saving level
s = saving rate (%)
K = capital stock
I = investment
k = (K/Y) or the capital output ratio
Now I = K (1)
S = sY (2)
K/Y = k (3)
K/Y = k (4)
In equilibrium S = I
Substituting (1) and (2) in (5) we
Expansionary Fiscal Policy
A. Expansionary Fiscal Policy :
has a multiplier effect on equilibrium Y. The size of
the multiplier is affected by the interest rate .
B. An increase in government purchases causes firms
to raise output ( increase income or Y )
Saudi Fiscal Policy
Fiscal Policy: government spending
Fiscal activities allow governments to provide
services, redistribute incomes and influence the
overall level of economic activity.
Fiscal Policy is one of the government tools for
Banking Sector of Saudi Arabia
In this sector we will discuss the following issues :
Early Banking History
The Development of Commercial Banking
Saudi Arabias Financial System :
1. Saudi Arabian Monetary Agency, SAMA
2. Commercial Banks
3. Specialized Cre
Lewis Model - An Overview
The Lewis model is structural change model that explains how labor transfers in
a dual economy. For Lewis growth of the industrial sector drives economic
growth. The Lewis Model argues economic growth requires structural
The industrial sector has shown strong growth in recent
years due to the strong budgetary support by the
government to the infrastructure development.
The government has been encouraging and promoting the
setting up of heavy industries s
III. The Structure of the Saudi
Here, we will focus on the aggregate variables related
to the Saudi economy and summarize its economic
The structure of the Saudi economy consist of :
First : Structure of Resources
Second : Struct
Here, we will discuss two factors :
1. Privatization objectives and
2. Basic issues to be dealt with
the privatization process .
I. Privatization Objectives and
1. Improving the efficiency of national economy an