The Harrod-Domar Model is the simplest and best-known production function used in the analysis of economic development. This model explains the relationship between the growth and unemployment in advanced capitalist societies. However, the Harrod-Domar Model is used in developing nations as an easy way of looking at the relationships between growth and capital requirements. This model does explain the differences in growth performances between countries. The model allows you to predict an estimate of growth for a nation. Which can be compared to predictions of growth for a different country.
             The "sources of growth" is a different form of the production function. This new function gives the analyst the ability to separate out the different causes of growth. The factors of this equation concern the growth rate of any variable, share of income in any input, national product, capital stock, labor, arable land & national resources, and measuring the shift in the production function resulting from greater efficiency in the case of inputs.
             Growth Accounting Analysis takes into account of two conclusions that are due to the variations in the way different economists carry out growth accounting. The analysis shows that the efforts to measure the sources of growth have shown that increases in productivity really account for the higher relation of growth. Also capital does not give as much to growth as assumed in early growth models. Capital does play a major role in the expansion of contemporary developing nations. An example of the analysis is in the comparison of wages. Perhaps the wages of a high school graduate is equivalent to the salary of 2 workers who have only had grade school education. Also the earnings for a college graduate maybe twice the amount of a worker of only high school education.
             Both the balanced and unbalanced growths predate much of the quantitative work on patters of development. B...