Question

13. The Smithian view of growth emphasizes what elements ?

Answer 1

According to Adam Smith, population development, capital growth, labor division (technological progress) and the institutional structure of the economy (competitive-free trading market system) are the key factors influencing the engine of economic growth. Smith also stressed the importance of a secure legal structure under which the unseen hand of the market might function and an open system of trade

One of Adam Smith's most important economic achievements was to implement the concept of growing yields generated by division of labour. He considered the benefit from division of labor or specialization to be a fundamental feature of social economy otherwise all, despite the crucial value of growing returns based on division of labor, the productivity of labor increases with the increase in market size. Along with division of labour, the acceleration of production or capital accumulation leads to an rise in economic growth and people's living standards.