Balance Conditions and Control Strategies for Economic Growth: Economic Advance-Retreat Course Analysis
International Journal of Management Science and Engineering Management, Vol. 4, No. 1, pp. 20-38, 2009
3 Pages Posted: 21 Feb 2009
Date Written: February 21, 2009
ARC(advance-retreat course) is an analysis theory and method which aims at socio-economic development issues. The main viewpoint of ARC theory is that the human can design and implement his economic strategies initiatively, and the environment synthesized by various objective factors has to accept human choice passively, but it can influence human behaviors in a manner of pressure or resistance. This dynamic game between human and the economic environment is different from the traditional game problems. Based on the theoretical framework of ARC (F. Dai, et al., 2007), the conception and the analytical expression of environmental elasticity are put forward in this paper. ARC model based on the environmental elasticity is established and a general solving method for the model is given out, which is simple and elegant. Balance relations for economic growth are given respectively for the ARC model based on exponential innovation and that based on power-law innovation. Some basic control strategies are put forward, such as improving the contribution rate of the integrated innovation to economic growth and changing the proportion of the natural growth rate of the basic economic interests in the synthetical growth rate of the endogenous motivity in economic development under the balance condition. At the end, the empirical analysis results give an effective support to the conclusions gotten in this paper.
Keywords: economic growth, advance-retreat course (ARC), environmental elasticity, balance conditions
JEL Classification: C50, E10, O11
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