What is the Big Push Theory in economic development, and what are the three kinds of indivisibilities associated with it?
Understand the Problem
The question discusses the Big Push Theory in economic development, focusing on the need for a substantial investment in underdeveloped countries. It outlines the importance of external economies and the simultaneous establishment of industries for successful economic growth. Additionally, it mentions three types of indivisibilities that contribute to the necessity of a 'big push.'
Answer
The Big Push Theory involves indivisibilities in production, demand, and the supply of savings.
The Big Push Theory in economic development stresses the importance of large-scale, coordinated investment to kickstart economic growth in underdeveloped countries. The three kinds of indivisibilities associated with it are: (i) Indivisibilities in the production function, (ii) Indivisibility of demand, (iii) Indivisibility in the supply of savings.
Answer for screen readers
The Big Push Theory in economic development stresses the importance of large-scale, coordinated investment to kickstart economic growth in underdeveloped countries. The three kinds of indivisibilities associated with it are: (i) Indivisibilities in the production function, (ii) Indivisibility of demand, (iii) Indivisibility in the supply of savings.
More Information
The Big Push Theory was introduced by Paul Rosenstein-Rodan and is fundamental in understanding development economics. The theory highlights that small, incremental investments might fail to break the cycle of poverty in underdeveloped countries, whereas substantial coordinated investments can trigger positive economic changes.
Tips
A common mistake is to focus solely on one area of investment, neglecting the interconnectedness of different sectors. To avoid this, ensure investments are balanced and coordinated across various sectors.
Sources
- Big push model - Wikipedia - en.wikipedia.org
- Big Push Theory of Economic Development - economicsdiscussion.net
- BIG PUSH THEORY - Kaliaganj College - kaliyaganjcollege.ac.in
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