Principles of Economics- Mankiw (5th) 512

Principles of Economics- Mankiw (5th) 512 - 530 PA R T N I...

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530 PART NINE THE REAL ECONOMY IN THE LONG RUN greater economic prosperity than did his or her parents, grandparents, and great- grandparents. Growth rates vary substantially from country to country. In some East Asian countries, such as Singapore, South Korea, and Taiwan, average income has risen about 7 percent per year in recent decades. At this rate, average income doubles every ten years. These countries have, in the length of one generation, gone from being among the poorest in the world to being among the richest. By contrast, in some African countries, such as Chad, Ethiopia, and Nigeria, average income has been stagnant for many years. What explains these diverse experiences? How can the rich countries be sure to maintain their high standard of living? What policies should the poor countries pursue to promote more rapid growth in order to join the developed world? These are among the most important questions in macroeconomics. As economist Robert Lucas put it, “The consequences for human welfare in questions like these are sim-
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