Critically examine the basic formulations of the Harrod-Domar model of economic growth. How does the Harrod model explain the occurrence of trade cycles?

The basic formulations of the Harood-Domar Model of economic growth are summarized as follows: -

(i)         Investment is the central theme of the HDM. It plays a dual role. On the one hand it generates income and on the other it creates productive capacity.

(ii)        The increased capacity results in greater output and greater employment, depending on the behavior of the income.

(iii)       Condition regarding the behavior of income can be expressed in terms of growth-rates _________ ________ ____ ____ ______ ___ ______.
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