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3. THEORY OF ECONOMIC GROWTH
a. Classical Theory
Classical economists provide the view that economic growth
is influenced by four factors, namely population size, capital
accumulation, land area and natural resources, and the level
of technology used.
b. Schumpeter's theory
Schumpeter first expressed his opinion regarding the theory
of economic growth in the book Theory of Economic
Development. Schumpter first assumed that there was a
perfectly competitive economy in steady equilibrium.
c. Keynesian theory
Keynes put forward a thought that became known as the
Keynesian Revolution in macroeconomic theory. Keynes's
theory emphasizes domestic effective demand as a strategic
variable to overcome stagnation in production factors.
d. Harrod-Domar theory
e. Neo-Classical Theory
