Which theory of growth is attributed to Rosenstein-Rodan?

The theory of ‘big push’ first put forward by P.N. Rosenstein-Rodan is actually a stringent variant of the theory of ‘balanced growth’. The crux of this theory is that the obstacles of development are formidable and pervasive. The development process by its very nature is not a smooth and uninterrupted process.

Which economic growth theory is explained by Professor Rosenstein-Rodan?

Rosenstein-Rodan’s famous 1943 article was the progenitor of the “Big Push” theory of economic development. His thesis, based on Young’s famous 1928 paper, argued that given increasing returns to scale, government-induced industrialization was possible to break the poverty traps in underdeveloped countries.

Who propound the theory of balanced growth?

The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously.

When did Rosenstein Rodan develop balanced growth theory?

In 1943 article, Rosenstein Rodan propounded this theory but without using the term balanced growth. He stated that the Social Marginal Product (SMP) of an investment is different from its Private Marginal Product (PMP).

What does the Rosenstein theory of economic development mean?

It means a specific amount of investment is necessary to remove the obstacles in the way of economic development. Rosenstein theory is better in the sense that it identified that market imperfections are the big obstacles in the way of economic development.

Who is the founder of balanced growth theory?

The balanced growth theory can be explained with the views of: (A) Views of Rosenstein Rodan: In 1943 article, Rosenstein Rodan propounded this theory but without using the term balanced growth. He stated that the Social Marginal Product (SMP) of an investment is different from its Private Marginal Product (PMP).

What did Rosenstein Rodan say about minimum quantum of investment?

In the words of Rosenstein Rodan, a high minimum quantum of investment requires a high volume of saving, which is difficult of achieve in low income underdeveloped countries. The way out of the vicious circle is to have first an increase in income and to provide mechanisms which assure that savings are higher.