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Chapter 19: Economic Development
Paul Romer on Economic Growth
Read Paul Romer's article
entitled: Economic Growth appearing in the Fortune Encyclopedia of
Economics.
a. Why does Romer place so much emphasis on the importance of economic
growth?
b. According to this document, why has the rate of economic growth in
Japan since World War II been higher than the U.S. growth rate? Why is
this likely to decline?
c. Discuss Romer's views concerning the "limits to growth" arguments.
d. What point is Romer making with the "milk cow" example?
e. Do you feel that Romer's suggestion for reducing poverty in India is
likely to be successful? Why or why not?
f. What does Romer suggest should be the direction of applied research
in the U.S.?
Lending for Industrial Technology
Read the World Bank's document
entitled: "Lending for Industrial Technology: Lessons from Six Countries."
a. Why is supplying loans for capital accumulation not enough to ensure
that capital is used efficiently?
b. Provide examples of the "incentives" that help to guarantee
that capital is allocated efficiently.
Technical Assistance
Read the World Bank's document
entitled: "Technical Assistance."
a. According to this study, what types of technical assistance programs
have been successful? What types of programs have been less successful?
b. Why are programs that are successful in one country not always as successful
in others?
c. Discuss the problems that the World Bank has found in technical assistance
programs. How is it trying to remedy these problems?
Select the "Country Ranks" link and review the current rankings
of Gross Domestic Product (GDP) and GDP per capita under the "Economy"
heading.
- What economic and political factors may explain the GDP per capita
rankings?
Read the information in "Understanding Poverty" under "Topics"
in the left column box. Navigate through all the topics by clicking on
the "Next" button at the bottom of each page.
- Define poverty as specified by the World Bank.
- Explain how poverty is measured at the country level. Assess the current poverty conditions and trends around the world.
- What development strategies are recommended to reduce the level of poverty in the world.