The old neoclassical theories

The old neoclassical theories - The old neoclassical...

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The old neoclassical theories 1. How can the history of economic growth be summarised by four stylised facts? Long-run per capita growth shows an exponential pattern Long-run growth is a very diverse experience especially across regions in the world Long-run growth is not an isolated national experience – but rather is ‘transmitted’ Since the industrial revolution long-run growth exhibits a pattern of leader nation (NL, UK, US) and different follower groupings (Europe, Oceania, West Asia, East Asia, Latin America and Africa) 2. What are the main explanatory factors of economic growth discussed in this course? 1 Savings and Investment This analysis suggests that a high rate of savings is a necessary condition for a high rate of growth in GDP. The analysis therefore suggests that a growth orientated government should also target research and development and the education and skills of its workers. 2 Government-Financed Investment The provision of infrastructure is difficult to achieve in a free market . it has too much of a public good aspect to be provided effectively by private companies. 3 Macroeconomic Stability Stability is also an important factor in the amount of foreign direct investment a country may be able to attract. For developing countries this may be the only realistic source of investment funds. 4 Trade Liberalisation, Capital Mobility and Exchange Rate Policy
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This note was uploaded on 03/31/2010 for the course ECONOMICS 322 taught by Professor H during the Spring '08 term at Kadir Has Üniversitesi.

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The old neoclassical theories - The old neoclassical...

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