User:Msrasnw/Drafts Kaldor Growth

Thirlwall (2003, p123-124) argues that there are three subsidiary propositions which are are also important to take into account. They are:
 * 1) That as the scope for the increasing returns sector to absorb the labour from the diminsihing returns sector reduces so too will the rate of growth of GDP.
 * 2) That in the early stages of industrialisation the demand comes from the agricultural sector. - but in the later stages export demand is likely to drive the process. Here the limited size of the internal market is likely to be such as to limit the relaisation of economies of scale and there is the need for generating foreign exchange to import necessary inputs.
 * 3) A virtuous circle can be generated by export growth and output growth but that this is difficult to establish as it is likely to depend on exceptional enterprise, protection or subsidy.