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Economic Growth and Development

Theories, Criticisms and an Alternative Growth Model

Hasan Gürak

Mainstream economic theories today are logical, consistent and even explanatory in many ways, when their relevance is tested in real economic situations, they often fail to correctly explain normal economic transactions. Thus they are only successful in explaining a fictional world and fictional economic relations that are largely based on unrealistic assumptions. Economic Growth is a study of new and alternative theories and models to replace the parables of these mainstream ideologies and hopes to appeal to open minded economists as a constructive contribution for the further development of new economic ideas.
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Chapter 2: Basic Concepts Related to Growth


Productivity and productivity growth are two popular concepts frequently referred to, not only by academicians but also by the “man on the street” in daily conversations. Though they are the basic concepts of economics, they often mean different things depending on who is referring to it and on the subject matter in question. The concept of productivity for the economist often has a different meaning than when the same concept is used by a politician, the military, teachers or the mayor of a town. There is a huge and substantial difference between a student’s productivity and a carpenter’s productivity or a musician’s productivity. In order to avoid confusion, it is necessary to define the concepts, within the framework of a particular analysis. The concept of productivity growth is of special significance as it implies economic “growth” which is the main subject of this book.

Productivity… But, by which criteria?

The CEO of an enterprise was very fond of Classical music. Someday, a re-nowned orchestra comes to his neighborhood. The most outstanding part of the concert is Schubert’s well-known “Unfinished Symphony”. The CEO receives an invitation to the concert but, due to a previous arrangement, he cannot attend the concert. The CEO gives the invitation to an employee an “expert on productivity analysis” and says:”

Go to the concert and represent me and let me know what you think about it”.

The day after the concert, CEO receives an evaluation report from the...

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