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Growth Theory and Development Planning

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  • Nitin Desai

    (Institute of Economic Growth)

Abstract

Professor Sukhamoy Chakravarthy was an outstanding growth theorist who had also worked as a development planner. This paper outlines his substantial contribution to connecting these two areas of discourse. It goes on to suggest areas where the changes that have taken place in reality require a reformulation of growth theory. The first of these is the change in the nature of globalisation with connected value chains, linked technology and capital flows requiring a reformulation of the link between trade and growth. The second is the growing concern about sustainability of development which requires a better integration of environment and economics through a more integrated view of the growth process and the measurement of the welfare value of growth through its impact on a comprehensive measure of wealth that includes natural capital along with manufactured capital and human capital. It also stresses the need to endogenise technology development and profit/wage distribution in growth theory if it is to be useful for development policy. It concludes with the argument that growth is a product of disequilibrium and that there should be greater reliance on the understanding of market based development provided by economists like Marx, Schumpeter, Keynes and Kalecki who connected theory better with the reality of economic dynamics.

Suggested Citation

  • Nitin Desai, 2023. "Growth Theory and Development Planning," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 21(2), pages 457-471, June.
    • Handle: RePEc:spr:jqecon:v:21:y:2023:i:2:d:10.1007_s40953-023-00345-y
    DOI: 10.1007/s40953-023-00345-y
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    References listed on IDEAS

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