Principles of Economic Growth经济增长原理.pptVIP

Endogenous Growth in the Harrod-Domar Model You may recognize the endogenous growth model as a reinterpretation of the Harrod-Domar model where growth depends on A. the saving rate B. the capital/output ratio C. the depreciation rate Investment: Quantity and Quality Compare Botswana and Tanzania: In Botswana, the share of State-Owned Enterprises in total investment fell from 16% in 1985-90 to 12% in 1990-97. In Tanzania, the SOE share of investment fell from 46% in 1985-90 to 23% in 1990-97. This is probably a good sign. Privatization helps improve investment. Investment: Quantity and Quality Investment quality, however, is not only a question of public vs. private enterprise. Sound banking is also important. It takes sound commercial banks, usually privately owned banks motivated by profit rather than by political concerns, to channel household savings into high-quality investment. Natural Resources and Economic Growth Natural resources, if not well managed, may turn out to be, at best, a mixed blessing. Three possible channels Education Dutch disease Rent seeking What is the evidence? What Is the Upshot? Economic growth responds to public policy. In particular, by encouraging saving and investment of high quality foreign trade and investment education ... the government can help foster rapid economic growth. Sir Arthur Lewis Got It Right What Else? These lessons are borne out by experience from around the world. Additional lessons: Too much inflation hurts saving, investment, and trade — and thereby also growth. Too much SOE activity hurts the quality of investment and education — and growth. Too much agriculture and, more generally, natural resource dependence, if not well managed, hurts education and trade — and thereby also growth. Too rapid population growth also tends to impede economic growth. Reservations Even so, the question of rapid growth is, of course, a bit more complicated. We also need to address a host of political, social, and cultural que