econ104-11 - 17/10/201113:34:00 BasicsofEconomicGrowth1and2

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17/10/2011 13:34:00 Basics of Economic Growth 1 and 2 There will be something about the rule of 72 on the midterm!!! What makes economies grow? Colander lists five factors: Growth compatible institutions o What are these? - property rights? Limited government? Lower taxes? o Investment and capital accumulation o physical, human and social capital o available resources - land, water, climate, energy o technological development o entrepreneurship What are growth-compatible institutions? Colander: laws and norms that allow people to keep most of what they  produce o Issues with this: o sometimes hard to measure an individual's productive contribution  public infrastructure as contributing to private investment. taxpayers are  contributing to my education – so the taxpayers have made me the  person via the public institution and the institution lets me pursue my 
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econ104-11 - 17/10/201113:34:00 BasicsofEconomicGrowth1and2

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