Harrod-Domar Model of Economic Growth

Capital formation plays a very important role in the process of development of a country. According to the Harrod-Domar model, eco­nomic growth depends on two important factors, viz., the saving ratio (i.e., the percentage of national income saved per annum) and the capital-output ratio. Since the capital-output ratio remains constant in the short run, the rate of growth of a [...]