Rostow's Stages of Economic Growth

Rostow argues that all economies pass through five stages on their road to full economic development.

• Traditional
• Transitional
• Take-off
• Drive to Maturity
• High mass consumption.

Stages

Traditional

Traditional economies are largely dependent upon subsidence.

Transitional to take off

Growing surplus leads to an expansion in investment. Higher investment promotes greater growth while rising incomes feed into AD. There is growth in the secondary sector.

Take off

Expanding AD, employment opportunities and growing incomes would lead to the development of infrastructure, human and physical capital associated with a mature economy.

High mass consumption

Lots of consumption within an economy which provides sustained demand for the outputs of a developed economy.

The most crucial part of the model is take off. The implication is that additional savings/investment could set off a chain reaction of development. This culminates in sustained economic development.