Skip to main content

Advertisement

SpringerLink
Log in

Growth Theory and Development Planning

  • Policy Perspectives
  • Published:
Journal of Quantitative Economics Aims and scope Submit manuscript

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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Chakravarty (1962, 1965, 1969), Chakravarty and Lefeber (1965), Chakravarty and Manne (1968).

  2. Chakravarty (1986b).

  3. ibid p. 11 and fn9.

  4. ibid fn4.

  5. Chakravarty (1982, 1987a).

  6. Chakravarty (1980, p. 104).

  7. Chakravarty (1987b).

  8. Chakravarty (1980, pp. 103–104).

  9. Chakravarty (1984, p. 851).

  10. ibid p. 851.

  11. Chakravarty (1980, p. 111).

  12. Stolper and Samuelson (1941).

  13. Dixit and Joseph (1977).

  14. Krugman (1979).

  15. Pun, Ngai et al. (2016).

  16. UNCTAD (2021).

  17. “The Brundtland Commission has had tremendous impact on governmental policy thinking. Documents of my little country’s government now always speak of “sustainable development”. I think that the “father” of this thinking is Nitin Desai, who was economic adviser to the commission.” Janez Stanovnik a member of the Brundtland Commission and later the President of Slovenia, cited in Weiss and Carayannis (2005).

  18. Desai Nitin (1986).

  19. See Desai Nitin (2007).

  20. Arrow et al. (2012) and Arrow et al. (2013).

  21. MOSPI (2013).

  22. Desai Nitin (1986).

  23. Arrow (1962) and Romer (1990).

  24. Kalecki (1935) and Kaldor (1957).

  25. Harrod (1939).

  26. Solow (1956), Solow (1957) and Swan (1956).

  27. Keynes (1937).

  28. Goodwin (1982).

  29. Fisher (1969) and Robinson (1953).

  30. Schumpeter (1934, 1942).

  31. Thanawala (1994).

  32. Kalecki (1935, 1942).

References

  • Arrow, Kenneth J. 1962. The economic implications of learning by doing. The Review of Economic Studies 29 (3): 155–173.

    Article  Google Scholar 

  • Arrow, K., P. Dasgupta, L. Goulder, K. Mumford, and K. Oleson. 2012. Sustainability and the measurement of wealth. Environment and Development Economics 17 (3): 317–353.

    Article  Google Scholar 

  • Arrow, K., P. Dasgupta, L. Goulder, K. Mumford, and K. Oleson. 2013. Sustainability and the measurement of wealth: Further reflections. Environment and Development Economics 18 (4): 504–516.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy. 1962. Optimal savings with finite planning horizon. International Economic Review 3 (3): 338–355.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy. 1965. Optimal programme of capital accumulation in a multi-sector economy. Econometrica 33: 557–570.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy. 1969. 1969. Capital and development planning: M.I.T. Press, Cambridge.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1979. On the question of home market and prospects for Indian growth. Economic and Political Weekly 1979: 1229–1242.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1980. Relevance of growth models to development planning. The Pakistan Development Review XIX (2): 101–112.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy. 1982. Alternative Approaches to the Theory of Economic Growth, Marx, Marshal and Schumpeter. In Memorial Lecture Centre for Studies in Social Science, ed. R.C. Dutt. Kolkata: Orient Longman.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1984. Aspects of India’s development strategy for 1980s. Economic and Political Weekly 1984: 845–852.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1986. POST KEYnesian THEORISTS and the THEORY of ECONOMIC DEVELOPMENT, The Revised version of a lecture delivered in June 1986 at Centre for Development Planning. Rotterdam: ERASMUS UNIVERSITY.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1987a. Marxist economics and contemporary developing economies. Cambridge Journal of Economics 11 (1): 3–22.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy. 1987b. Development Planning: The Indian Experience. Oxford: Oxford University Press.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1987c. The state of development economics. The Manchester School of Economic & Social Studies 55 (2): 125–143.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy. 1990. Development strategies for growth with equity: the South Asian experience. Asian Development Review 8 (1): 133–159.

    Google Scholar 

  • Chakravarty, Sukhamoy. 1991. Development planning: a reappraisal. Cambridge Journal of Economics 15 (1): 5–20.

    Article  Google Scholar 

  • Chakravarty, Sukhamoy, and Louis Lefeber. 1965. An optimizing planning model. The Economic Weekly 17 (5): 6.

    Google Scholar 

  • Chakravarty, Sukhamoy, and Alan S. Manne. 1968. Optimal growth when the instantaneous utility function depends upon the rate of change in consumption. The American Economic Review 58 (5): 1351–1354.

    Google Scholar 

  • Chakravarty, Sukhamoy, (1986) Development dialogue in the 1980s and beyond. Economic and Political Weekly 21 (52) : 2267–2272.

    Google Scholar 

  • Dixit, Avinash, and Joseph Stiglitz. 1977. Monopolistic competition and optimum product diversity. American Economic Review. 67 (3): 297–308.

    Google Scholar 

  • Domar, Evsey. 1946. Capital expansion, rate of growth, and employment. Econometrica 14 (2): 137–147.

    Article  Google Scholar 

  • Fisher, Franklin M. 1969. The Existence of Aggregate Production Functions. Econometrica 37 (4): 553–557.

    Article  Google Scholar 

  • FitzGerald, E.V.K. 1990. Kalecki on financing development: an approach to the macroeconomics of the semi- industrialised economy. Cambridge Journal of Economics 14 (2): 183–203.

    Google Scholar 

  • Goodwin, Richard M. 1982. A growth cycle. Essays in economic dynamics, 165–170. London: Palgrave Macmillan (Presented at the First World Congress of the Econometric Society, held in Rome, 1965).

    Book  Google Scholar 

  • Harrod, Roy F. 1939. An essay in dynamic theory. The Economic Journal. 49 (193): 14–33.

    Article  Google Scholar 

  • Jorgensen Dale, W., and K. Vu Phuong. 2005. Information Technology and the World Economy. The Scandinavian Journal of Economics 107 (4): 631–650.

    Article  Google Scholar 

  • Kalecki, Michael. 1935. A Macrodynamic Theory of Business Cycles. Econometrica 3 (3): 327–344.

    Article  Google Scholar 

  • Kalecki, Michael. 1942. A theory of profits. The Economic Journal 52 (206/207): 258–267.

    Article  Google Scholar 

  • Keynes, J.M. 1937. The general theory of employment. The Quarterly Journal of Economics 51 (2): 209–223.

    Article  Google Scholar 

  • Krugman, P.R. 1979. Increasing returns, monopolistic competition, and international trade. Journal of International Economics 9 (4): 469–479.

    Article  Google Scholar 

  • Ministry of Statistics & Programme Implementation (2013), Green National Accounts: A Framework, MOSPI Government of India.

  • Nicholas, Kaldor. 1957. A model of economic growth. The Economic Journal 67 (268): 591–624.

    Article  Google Scholar 

  • Desai Nitin (1986). Note on the Concept of Sustainable Development. https://www.academia.edu/39511069/ Note on the Concept of Sustainable Development

  • Nitin, Desai. 2007. Sustainable Development. In The Oxford Companion to Economics in India, ed. Kaushik Basu, 506–509. New Delhi: Oxford University Press.

    Google Scholar 

  • Pun, Ngai, Yuan Shen, Yuhua Guo, Huilin Lu, Jenny Chan, and Mark Selden. 2016. Apple, Foxconn, and Chinese workers’ struggles from a global labor perspective. Inter-Asia Cultural Studies. 17: 166–185.

    Article  Google Scholar 

  • Ramsey, Frank. 1928. A mathematical theory of savings. The Economic Journal 38 (152): 543–559.

    Article  Google Scholar 

  • Reserve Bank of India. 1985. Report of the committee to review the working of the monetary system. Kolkata: RBI.

    Google Scholar 

  • Robinson, Joan. 1953. The production function and the theory of capital. THe Review of Economic Studies 21 (2): 81–106.

    Article  Google Scholar 

  • Romer, Paul M. 1986. Increasing returns and long-run growth. Journal of Political Economy 94 (5): 1002–1037.

    Article  Google Scholar 

  • Romer, Paul M. 1990. Endogenous technological change. Journal of Political Economy 98 (5): 71–102.

    Article  Google Scholar 

  • Romer, Paul M. 1994. The origins of endogenous growth. The Journal of Economic Perspectives 8 (1): 3–22.

    Article  Google Scholar 

  • Schumpeter, Joseph A. 1934. Theory of Economic Development. Piscataway: Transaction Publishers.

    Google Scholar 

  • Schumpeter, Joseph A. 1942. Capitalism, Socialism and Democracy, 1942. London: Routledge.

    Google Scholar 

  • Schumpeter, Joseph A. 2005. Development (with an introduction by Marcus Becker et al). Journal of Economic Literature 43 (1): 108–120.

    Article  Google Scholar 

  • Solow, Robert M. 1956. A contribution to the theory of economic growth. Quarterly Journal of Economics. 70 (1): 65–94.

    Article  Google Scholar 

  • Solow, Robert M. 1957. Technical change and the aggregate production function. Review of Economics and Statistics. 39 (3): 312–320.

    Article  Google Scholar 

  • Stolper, Wolfgang F., and Paul A. Samuelson. 1941. Protection and real wages. The Review of Economic Studies 9 (1): 58–73.

    Article  Google Scholar 

  • Swan, Trevor. 1956. Economic growth and capital accumulation. Economic Record. 32 (2): 334–361.

    Article  Google Scholar 

  • Taylor, O.H. 1951. Schumpeter and Marx: Imperialism and Social Classes in the Schumpeterian System. The Quarterly Journal of Economics 65 (4): 525–555.

    Article  Google Scholar 

  • Thanawala, Kishor. 1994. Schumpeter’s “Theory of economic development” and development economics. Review of Social Economy 52 (4): 353–363.

    Article  Google Scholar 

  • UNCTAD (2021). Estimates of global e-commerce 2019 and preliminary assessment of covid-19 impact on online retail. UNCTAD Technical Notes on ICT for Development No. 18 May 2021

  • Weiss, Thomas G. & Tatiana Carayannis (2005). Ideas Matter: Voices from the United Nations, Forum for Development Studies | No. 1-2005

Download references

Author information

Authors and Affiliations

  1. Life Trustee, Institute of Economic Growth, New Delhi, India

    Nitin Desai

Authors
  1. Nitin Desai
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Nitin Desai.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Third Prof. Sukhamoy Chakravarty Memorial Lecture

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Desai, N. Growth Theory and Development Planning. J. Quant. Econ. 21, 457–471 (2023). https://doi.org/10.1007/s40953-023-00345-y

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40953-023-00345-y

Keywords

Search

Navigation