Why do some economies grow faster than others? He belonged to a small group of outstanding scientists considered to be the greatest of their time, who shaped the profession unlike anybody else. For half a century, Solow was a professor at MIT, always leaving his office door open to encourage young people to talk to him. His work is extraordinary, as is his one-in-a-million attitude, being gracious, mild and eloquent as ever at the age of
The two countries are of similar size, population, and possess similar natural resources. They each have port cities with easy access to the world. Their governments were founded on socialist principles.
This paper will examine the reasons behind the disparate economic performance of countries, and then specifically examine the economies of Israel and Cuba. Geography plays an important role in economic growth.
It is more difficult to ship and receive goods in landlocked countries. Extremely hot or extremely cold climates limit the amount of human exertion possible and require more inputs in the form of heating and air conditioning.
Ceteris paribus, most economists would agree that the next most important element of economic growth is a market oriented economy.
The things that are necessary to facilitate a smooth transition to a market economy follow. People must have the freedom to seek utility and produce goods and services.
Individuals must also have the right to own property, and the opportunity to succeed or fail. Economic growth will be diminished if individuals do not have the right to own property and the opportunity to succeed.
Individuals must also be educated to the extent that they can assess the utility of various goods and services and choose the ones that best satisfy their needs.
Actions that replace, inhibit, or restrict these activities in any way will result in market failure. Implementing a market economy without rules will result in excessive rent seeking, activities in restraint of trade, restricted alternatives, and excessive inequality. Government must ensure there are rules laws to make sure competition is healthy.
This should include laws to prohibit: To insure some level of equity, governments should also put measures in place to capture and redistribute wealth. This should include progressive income and inheritance taxes and various social welfare programs.
Using taxes to build infrastructure and education programs will accomplish income redistribution and position the economy for further growth.
Determining the extent to which equity should be pursued is a balancing act. If governments pursue equity too fervently, individual investment and effort will be stymied. If equality is not pursued, the resulting inequality will result in class strife and market failure.
The ability to raise money and finance new businesses is critical to economic growth.Many firms from the outperforming economies are growing faster and providing higher shareholder returns than their peers in advanced economies.
Companies ranked in the top quartile in terms of total return to shareholders delivered average returns of 23 percent from to , compared with 15 percent for high performers in advanced economies.
Dec 01, · There are some things we know keeps country's economy from growing (corruption, civil war, too much government interference like in communist countries), but we do not have a theory that explains why economies grow that Status: Resolved. Sep 12, · Why some emerging economies grow faster and more consistently than others?
Here are the reasons. September 12, 0 Comment. Many firms from the outperforming economies are growing faster and providing higher shareholder returns than their peers in advanced economies.
Companies ranked in the top . In the Solow model rich countries enjoy a higher level of capital per worker (K/L, or k), which enables those workers to be more productive.
So a rich country might be at K0, while a poor country is at K1. Why Some Economies Grow Faster Than Others A Comparison of Cuba and Israel Harry M.
Geedey Professor Evelyn Bolden Economics March 1, Abstract The governments of Cuba and Israel are relatively young. The two countries are of similar size, population, and possess similar natural resources. They each have port cities with easy access to the world.
The US could grow at four percent for a year or two by bringing more people into employment, by using the capital that we have more intensively.
But in the long term we know the only way to get sustained faster growth is to have sustained faster technological progress.