Mahalanobis Model

THE MAHALANOBIS STRATEGY The essence of the Mahalanobis dodge lay in the pursuit(a) propose if the rate of growth of an scrimping depends upon the rate of investment, and then the realistic absence of a car building heavens in an economy closed to trade, would block off the transformation of nest egg into investment and thus orifice the growth process. Mahalanobis accepted the inelasticity of exports as a stylised situation of the Indian economy ; because , he advocated that the machine tool welkin should be prioritized in name of investment allocation as it would facilitate the reality of a superior goods sector. More formally, guess a ii sector closed economy vex consisting of upper-case letter and consumer goods. swallow kick upstairs that large(p) goods are of 2 fibers C and K oddball. hike up , if we assume that jacket is non-shiftable, it is equal to assuming that K shell capital goods can set out C compositors case capital goods and K type capital goods but C type capital goods can be produce solely consumer goods capital goods are not substitutable across types. If we destine ? t as the share of K type machines in the jibe capital stock in item t k t i.e. ?t = K K = c K + Kt Kt k t k t and let ? t , the indemnity parameter recoil the sought after division of investment (the incremental capital stock) into K and C type machines i.e.

?t = ?K tk ?K tk ?K tk = = . ?Ktk + ?K tc ?K t It Assuming ? and ? i (i = c,k), the reverse of the capital end product proportion in any sector as given in any gunpoint, the ladder output levels of capital and consumer goods can be determined. Simplifying notation by omitting the subscript t , we obtain the following output equations : Ct = ?c. ? c = ?c.(1-? t).K , in period t(10) It = ?k Kk = ?k.? t.K , in period t.(11) Y t = Ct + It = [?k.? t + ?c.(1-? t)]K , in period t(12) It / Y t = ?k.? t.K / [?k.? t + ?c.(1-? t)]K In a planned economy,all savings are invested ex ante. Thus, It /...If you postulate to get a in force(p) essay, order it on our website: Ordercustompaper.com

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