Quantitative and qualitative growth analysis (Q1433609)

The author presents a simplified picture of quantitive and qualitative economic growth. In the present analysis the author uses an own model of equilibrium growth and a rate of interest required by the financial investors oriented to material and human capital investments of the traditional kind. Among those there are financial investors oriented to product research and development and requiring a much higher rate of interest of their financial investments. In an economy with no research and development investments there would be only the possibility of quantitative growth. For any other economy the equilibrium growth process would imply a combination of quantitative and qualitative growth. There has been a lot of arguments by researchers that a state development economy must necessarily be in a more or less permanent disequilibrium. This seems to be confusing the issue. Although each firm might experience typical signs of disequilibrium when products and projects fail or substantially exceed profit expectations, these individual fluctuations might very well average out in the economy as a whole, giving the growth of quality and quantity a dynamic growth equilibrium.