Capital Structures: Vectorizing the Harrod-Domar Model in Macro-Economics

Abstract

The epistemological status of economic theory is either as an idealistic pre-scription or a depiction of a factual reality in context. We examine the reality of the macro-economic model of Harrod-Domar in the context of the Japa-nese, Korean and American economic history. Empirically, one sees that the model remained ideal but incomplete in fact. The capital structures in an economy determined whether capital flowed ideally or otherwise. This is a cross-disciplinary research approach combining the economic perspective with the management perspective in the disciplines of the social sciences.