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The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously.〔〔 This will enlarge the market size, increase productivity, and provide an incentive for the private sector to invest. Nurkse was in favour of attaining balanced growth in both the industrial and agricultural sectors of the economy.〔 He recognised that the expansion and inter-sectoral balance between agriculture and manufacturing is necessary so that each of these sectors provides a market for the products of the other and in turn, supplies the necessary raw materials for the development and growth of the other. Nurkse and Paul Rosenstein-Rodan were the pioneers of balanced growth theory and much of how it is understood today dates back to their work.〔 Nurkse's theory discusses how the poor size of the market in underdeveloped countries perpetuates its underdeveloped state.〔〔 Nurkse has also clarified the various determinants of the market size and puts primary focus on productivity.〔〔 According to him, if the productivity levels rise in a less developed country, its market size will expand and thus it can eventually become a developed economy. Apart from this, Nurkse has been nicknamed an export pessimist, as he feels that the finances to make investments in underdeveloped countries must arise from their own domestic territory.〔 No importance should be given to promoting exports.〔 == Size of market and inducement to invest == The size of a market assumes primary importance in the study of what induces investment in a country. Ragnar Nurkse referenced the work of Allyn A. Young to assert that inducement to invest is limited by the size of the market.〔 The original idea behind this was put forward by Adam Smith, who stated that division of labour (as against inducement to invest) is limited by the extent of the market.〔 According to Nurkse, underdeveloped countries lack adequate purchasing power.〔 ''Low purchasing power'' means that the real income of the people is low, although in monetary terms it may be high. If the money income were low, the problem could easily be overcome by expanding the money supply; however, since the meaning in this context is real income, expanding the supply of money will only generate inflationary pressure. Neither real output nor real investment will rise. It is to be noted that a low purchasing power means that domestic demand for commodities is low. Apart from encompassing consumer goods and services, this includes the demand for capital as well. The size of the market determines the incentive to invest irrespective of the nature of the economy.〔 This is because entrepreneurs invariably take their production decisions by taking into consideration the demand for the concerned product. For example, if an automobile manufacturer is trying to decide which countries to set up plants in, he will naturally only invest in those countries where the demand is high.〔 He would prefer to invest in a developed country, where though the population is lesser than in underdeveloped countries, the people are prosperous and there is a definite demand. Private entrepreneurs sometimes resort to heavy advertising as a means of attracting buyers for their products. Although this may lead to a rise in demand for that entrepreneur's good or service, it does not actually raise the aggregate demand in the economy. The demand merely shifts from one provider to another.〔 Clearly, this is not a long-term solution. Ragnar Nurkse concluded, 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Ragnar Nurkse's balanced growth theory」の詳細全文を読む スポンサード リンク
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