WMU ECON 3880 - Economic Growth: Concepts and Patterns (41 pages)

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Economic Growth: Concepts and Patterns



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Economic Growth: Concepts and Patterns

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Lecture Notes


Pages:
41
School:
Western Michigan University
Course:
Econ 3880 - African Economies

Unformatted text preview:

Norton Media Library Chapter 3 Economic Growth Concepts and Patterns Dwight H Perkins Steven Radelet David L Lindauer Economic Growth Concepts Patterns Divergent Patterns of Economic Growth since 1960 Factor Accumulation Productivity Growth Econ Growth Saving Investment Capital Accumulation Sources of Growth Analysis Characteristics of Rapidly Growing Countries Macroeconomic and Political Stability Investment in Health and Education Effective Governance and Institutions Favorable Environment for Private Enterprise Favorable Geography Diminishing Returns and the Production Function The Convergence Debate Economic Growth and Structural Change Divergent Patterns of Economic Growth since 1960 After 1960s LDCs begin to diverge For example per capital income in Thailand was 1100 and that of Zambia was 1200 Thailand now has per capita income of 7000 but Zambia is about 900 What happended Growth difference Thailand grew over 4 5 and Zambia growth was 0 6 negative See table 3 1 for Average Growth Rates across countries 1960 2003 Negative Growth Nigeria Zambia Chad etc 0 Slow Growth Kenya Ghana Rwanda Argentina 0 12 G 1 3 Moderate growth Lesotho Egypt Brazil India 2 1 G 2 75 Rapid Growth Botswana Malaysia South Korea Singapore 3 32 G 6 3 Industrial Countries Japan USA Canada UK Japan G 4 11 USA 2 42 Why is Botswana Successful Read Box 3 1 Between 1970 90 Botswana was the fastest growing country in the world at about 8 per year But at independence in 1965 it was poor it had 100 high school graduates and 22 college graduates What is the main source of success Good policies and strong institution and democratic government Protection of property rights and minimal corruption including civil service base on merit not on patronage These has led to highest per capital income and best HDI Recent challenge High HIV AIDS infection rate has reversed this Factor Accumulation Productivity Growth Econ Growth Factor Accumulation increase in the size of capital stock and labor force More



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