Rostow’s Stages of Economic Growth pt. 2
This is a continuation of Rostow’s Stages of Economic Growth pt. 1
After the initial take-off, an economy much move towards a maturity stage, or else it runs the risk of major instability and contraction, after the initial boom. The industrial sector of the economy begins to diversify and take over multiple industries. New methods of production and technologies begin to develop at a rate that was previously unprecedented. The consumer base of the economy has achieved an incredibly high purchasing power that allows currency to circulate, quickly. This means that most manufacturing begins to focus on this new consumer base. Infrastructure begins to exponentially expand, so that this growth can be enjoyed by the entire geographic area of the economy. This means that transportation modes must be implemented, immediately. Other social programs, such as primary and secondary educational institutions are invested in, as well as investments towards a healthier population, such as hospitals.
After an economy has reached its potential of maturity, it begins to experience the final stage of mass consumption. This is where industrialization has spread to every facet of the economy, and all products are driven through the industrial mechanisms. Primary sectors are not needed nearly as much, as the methods of manufacturing (secondary sectors) are far more crucial at this stage. High-valued goods begin to circulate at incredibly high rates. Personal transportation takes an important role in people’s lives, such as cars and personal vehicles. However, the primary marker of this type of stage in economic growth is that consumers usually have a strong supply of disposable income, which is what drives multiple sectors of the economy to function at full capacity. This means that the velocity of income is at an all-time high, and the primary functions of the economy are in full working order.