Question

What role does the government play in industrialisation?
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Answer 1

Answer:

We construct a two-sector endogenous growth model to examine the role of government in industrialization.

Three main features of this model are :

(a) household preference is non-homothetic;

(b) government’s sector-specific spending is introduced as a production factor and

(c) technological progress occurs only in the manufacturing sector through learning-by-doing.

By using the model with these features, we derive the optimal policy for government resource allocation, optimal tax rate and share of government spending for each sector, to maximize the household’s utility.

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Explanation:

Answer 2

By approving the permission to build industries the govt gets allot of economy . by taxes