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This paper formulates a simple aggregate growth model that is capable of assessing the impact of macroeconomic policies on the long-term performance of a developing country. The model emphasizes expenditures on human capital and the dynamics of external debt, and yields empirically testable hypotheses on the relative importance of various determinants of long-term growth performance. The analytical results suggest a number of implications that are relevant to the design of growth-oriented adjustment programs.

Aggregate Factor Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- Capital productivity --- Debts, External --- Domestic savings --- Employment --- Exports and Imports --- External debt --- Human Capital --- Human capital --- Income economics --- Income --- Intergenerational Income Distribution --- International economics --- International Lending and Debt Problems --- Labor Productivity --- Labor --- Labour --- Macroeconomics --- Macroeconomics: Consumption --- Occupational Choice --- Production and Operations Management --- Saving and investment --- Saving --- Skills --- Unemployment --- Wages --- Wealth

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This paper analyzes an economy in which there are no interest-bearing assets, only equity shares. Equilibrium conditions are derived for the case of a closed economy, an open economy with trade in goods only, and finally one with trade in both goods and equity shares. It is shown that the rate of return to capital equilibrates savings and investment, that the differential between the domestic and foreign rates of return to equity determines the direction of capital flows, and that under a fixed exchange rate system, adjustments induced by exchange rate changes are channeled through the asset accounts.

Adjustment process --- Aggregate Human Capital --- Aggregate Labor Productivity --- Balance of payments --- Balance of trade --- Capital productivity --- Current Account Adjustment --- E-Commerce --- Empirical Studies of Trade --- Employment --- Exports and Imports --- Financial Instruments --- Institutional Investors --- Intergenerational Income Distribution --- International economics --- Investment & securities --- Investments: Stocks --- Macroeconomics --- Non-bank Financial Institutions --- Pension Funds --- Production and Operations Management --- Retail and Wholesale Trade --- Short-term Capital Movements --- Stocks --- Trade balance --- Trade in goods --- Unemployment --- Wages