For effecting a
significant improvement in living standards , the rate of capital formation and
the consequent rate of growth of output must be viewed in relation to the rate
of population growth. It may be that the population may be increasing so fast
as to offset even a quick rate of capital formation and the resultant increase
in output . It is therefore, necessary to ensure that rates of population
growth and of capital formation must be
such as to yield a high per capita output . Conflicting opinions have been expressed
by economists as to whether population growth it a stimulant to economic growth
or an obstacle in way. Owing to inadequate response to agricultural production to meet the requirements
of a growing population. Malthus and
Ricardo dreaded a rapid increase in population and thought it would spell
misery and starvation. But with the remarkable growth of industry. World trade and revolution in
agricultural techniques the bogey of over population was laid at rest and
the western economists veered round to the view that growth of population
stimulated economic growth.
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