Cumulative Marginal Productivity, Life of Plants and the Optimal Technology

Abstract

In the post World War II period, an ever growing concern has been accorded to economic development in general and to that of the underdeveloped countries in particular. The economic development of a country mostly depends on how best the resources are utilised. The rate of growth of the country can be maximised only when the optimal allocation of resources is obtained. And the latter can be achieved only when the optimal techniques of production are introduced. The choice of optimal technology is one of the most essential elements in the maximisation of economic growth. During the last decade a good deal of attention has been given to the choice of technology and several criteria have been put forward. We shall briefly examine these criteria first and then develop a more comprehensive approach which contains some essential considerations that have so far been neglected. The criteria which have been hitherto advanced can be broadly classified into two categories; one is based on the principle of the minimisation of real cost and the other on that of the maximisation of savings.