Capital accumulation is necessary for sustained growth from "summary" of Theory of Economic Growth by W. Arthur Lewis
Capital accumulation is at the heart of the process of economic growth. It is through the accumulation of capital that a society is able to increase its productive capacity and generate sustained growth. This process involves saving a portion of current income and investing it in physical and human capital to enhance productivity in the future. In the initial stages of development, capital accumulation plays a crucial role in jumpstarting economic growth. By investing in new technologies, infrastructure, and education, a society can increase its productivity levels and lay the groundwork for sustained growth. As more capital is accumulated, the economy becomes more efficient and is able to produce more goods and services. In the long run, sustained growth is only possible through continuous capital accumulation. As the economy grows, there is a need for further investment in capital to maintain and expand the productive capacity of the society. Without ongoing capital accumulation, the economy is likely to stagnate and fail to achieve sustained growth. Furthermore, capital accumulation is essential for raising living standards and reducing poverty. By increasing the productive capacity of the economy, capital accumulation leads to higher levels of output and income. This, in turn, allows for improvements in living standards, as individuals have access to more goods and services.- Capital accumulation is a necessary condition for sustained economic growth. It is through the process of saving, investing, and expanding the capital stock that a society is able to increase its productivity levels and generate long-term growth. Without continuous capital accumulation, the economy is likely to stagnate and fail to achieve sustained growth.
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