| KALDOR'S
THEORY | This idea is a response to the Harod-Domar model, which explains an economy's rate of growth in
terms of saving and capital. It implies that there is no natural need for an economy's growth to be
balanced. But in Kaldor's theory, he emphasize that there is a natural economy's growth. |
| Formulas: | Wages = sahod (laborer)
Profit = tubo (producers)
Savings = ipon (laborer and producers) |
| Wages + Profit = Capital | - The idea that society's income will be allocated among different classes is the foundation of Kaldor's
theory. so mangyayari lang yung equilibrium (situation when supply and demand are matched and the
price is stable) |
| Savings = Investment | - On the other hand, may relation din yung income distribution sa amount of savings. If you have
savings, turn it into investment so that it can help the economic growth rate. |
| Wages + Profit = National Income | Lahat ng profit kailangan i-save. Yung wages kalangan mag-lead into consumption. Yung mga pera ng
laborer yun ang paiikutin para sa economy. |
| Savings from Wages + Savings from Profit = Savings | Sa formula na 'to sinasabi na dapat mas mataas ang savings ng profit (producers) kaysa sa savings ng
wages (laborers) dahil ito yung way ng para mapanatili yung equilibrium. Para walang inflation rate na
mangyayari. Yung savings ng wages hindi dapat sya mag turn into investments kasi mababawasan ang
consumers ng society |
| ADVANTAGE OF KALDOR'S THEORY | - There will be a natural balanced growth, more productivity, equilibrium might be a normal thing.
- Applicable for low-income countries |
| DISADVANTAGE OF KALDOR'S MODEL | -The theory does not tell us how the distribution of income in a functional sense will be affected by
changes in real income below the full employment level.
-There will only 2 types of social classes (wage earners and entrepreneur)
-- Wage earners will always be a wage earners |
