Resource allocation impacts growth potential from "summary" of Theory of Economic Growth by W. Arthur Lewis
The utilization of resources within an economy plays a critical role in determining its growth potential. When resources are allocated inefficiently, the overall productivity of the economy is hindered, thus limiting its capacity for growth. In contrast, effective resource allocation can enhance productivity and create opportunities for sustained economic expansion. Inefficient resource allocation can lead to underutilization of resources, resulting in lower output levels than what could be achieved with optimal resource distribution. This not only reduces the overall output of the economy but also hampers its ability to generate wealth and improve living standards. In such a scenario, the growth potential of the economy is constrained, as resources are not being utilized to their fullest capacity. Furthermore, inefficient resource allocation...
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