《计量经济学》课程教学资源（国外经典教科书）Introduction to Modern Economic Growth

INTRODUCTION TO MODERN ECONOMIC GROWTH GAB GHAGNB CIVBOE ER GMBFA MOZ 0 average growth investment 1960-2000 FIGURE 1. 16. The relationship between average growth of gDP per capita and average growth of investments to gDP ratio, 1960-2000 Figure 1.16 shows a strong positive association between the average growth of investment to GDP ratio and economic growth. Figure 1. 17 shows a positive cor relation between average years of schooling and economic growth. These figures therefore suggest that the countries that have grown faster are typically those that have invested more in physical capital and those that started out the postwar era with greater human capital. It has to be stressed that these figures do not imply that physical or human capital investment are the causes of economic growth(even though we expect from basic economic theory that they should contribute to in creasing output). So far these are simply correlations, and they are likely driven, at least in part, by omitted factors affecting both investment and schooling on the one hand and economic growth on the other We will investigate the role of physical and human capital in economic growth further in Chapter 3. One of the major points that will emerge from our analysis 24

Introduction to Modern Economic Growth ARG AUS AUT BDI BEL BEN BFA BGD BOL BRA BRB CAN CHE CHL CHN CIV CMR COG COL COM CPV CRI DNK DOM DZA ECU EGY ESP ETH FIN GAB FRA GBR GHA GIN GMB GNB GNQ GRC GTM HKG HND IDN IND IRL IRN ISL ITAISR JAM JOR JPN KEN KOR LKA LSO LUX MAR MDG MEX MLI MOZ MUS MWI MYS NER NGA NIC NLD NOR NPL NZL PAK PAN PER PHL PRT PRY ROM RWA SEN SLV SWE SYC SYR TCD TGO THA TTO TUR TZA URY UGA USA VEN ZAF ZMB ZWE -.0 2 0 .0 2 .0 4 .0 6 a v erage gro wth gdp per capita 19 6 0-2 0 0 0 -.05 0 .05 .1 .15 average growth investment 1960-2000 Figure 1.16. The relationship between average growth of GDP per capita and average growth of investments to GDP ratio, 1960-2000. Figure 1.16 shows a strong positive association between the average growth of investment to GDP ratio and economic growth. Figure 1.17 shows a positive cor￾relation between average years of schooling and economic growth. These figures therefore suggest that the countries that have grown faster are typically those that have invested more in physical capital and those that started out the postwar era with greater human capital. It has to be stressed that these figures do not imply that physical or human capital investment are the causes of economic growth (even though we expect from basic economic theory that they should contribute to in￾creasing output). So far these are simply correlations, and they are likely driven, at least in part, by omitted factors affecting both investment and schooling on the one hand and economic growth on the other. We will investigate the role of physical and human capital in economic growth further in Chapter 3. One of the major points that will emerge from our analysis 24

INTRODUCTION TO MODERN ECONOMIC GROWTH KOR IR:RB INDSYGRS 8 JOR RH PURY BEN CA BOL average schooling 1960-2000 FIGURE 1.17 there is that focusing only on physical and human capital is not sufficient. Both to understand the process of sustained economic growth and to account for larg cross-country differences in income, we also need to understand why societies differ in the efficiency with which they use their physical and human capital. We normally use the shorthand expression "technology"to capture factors other than physical and human capital affecting economic growth and performance(and we will do so throughout the book. It is therefore important to remember that technology dif- ferences across countries include both genuine differences in the techniques and in the quality of machines used in production, but also differences in productive effi- ciency resulting from differences in the organization of production, from differences in the way that markets are organized and from potential market failures(see in particular Chapter 23 on differences in productive efficiency resulting from the orga nization of markets and market failures). a detailed study of"technology"(broadly 25

Introduction to Modern Economic Growth ARG AUS AUT BDI BEL BEN BGD BOL BRA BRB CAN CHE CHL CHN CMR COG COL CRI DNK DOM DZA ECU EGY ESP FIN FRA GBR GHA GMB GRC GTM HKG HND IDN IND IRL IRN ISL ITA ISR JAM JOR JPN KEN KOR LKA LSO MEX MLI MOZ MUS MWI MYS NER NIC NLD NOR NPL NZL PAK PAN PER PHL PRT PRY RWASEN SLV SWE SYR TGO THA TUR TTO UGA URY USA VEN ZAF ZMB ZWE -.0 2 0 .0 2 .0 4 .0 6 a v erage gro wth gdp per capita 19 6 0-2 0 0 0 0 2 4 6 8 10 average schooling 1960-2000 Figure 1.17 there is that focusing only on physical and human capital is not sufficient. Both to understand the process of sustained economic growth and to account for large cross-country differences in income, we also need to understand why societies differ in the efficiency with which they use their physical and human capital. We normally use the shorthand expression “technology” to capture factors other than physical and human capital affecting economic growth and performance (and we will do so throughout the book). It is therefore important to remember that technology dif￾ferences across countries include both genuine differences in the techniques and in the quality of machines used in production, but also differences in productive effi- ciency resulting from differences in the organization of production, from differences in the way that markets are organized and from potential market failures (see in particular Chapter 23 on differences in productive efficiency resulting from the orga￾nization of markets and market failures). A detailed study of “technology” (broadly 25

INTRODUCTION TO MODERN ECONOMIC GROWTH construed)is necessary for understanding both the world-wide process of economic growth and cross-country differences. The role of technology in economic growth will be investigated in Chapter 3 and in later chapters 1. 7. From Correlates to Fundamental causes The correlates of economic growth, such as physical capital, human capital and technology, will be our first topic of study. But these are only proximate causes of economic growth and economic success(even if we convince ourselves that there is a causal element the correlations shown above). It would not be entirely satisfac tory to explain the process of economic growth and cross-country differences with technology, physical capital and human capital, since presumably there are reasons for why technology, physical capital and human capital differ across countries. In particular, if these factors are so important in generating large cross country income differences and causing the takeoff into modern economic growth, why do certain societies fail to improve their technologies, invest more in physical capital, and ac- cumulate more human capital? Let us return to Figure 1. 8 to illustrate this point further. This figure shows that South Korea and Singapore have managed to grow at very rapid rates over the past 50 years, while Nigeria has failed to do so. We can try to explain the successful performance of South Korea and Singapore by looking at the correlates of economic growth-or at the proximate causes of economic growth. We can conclude, as many have done, that rapid capital accumulation has been was very important in gener- ating these growth miracles, and debate the role of human capital and technology We can blame the failure of Nigeria to grow on its inability to accumulate capital and to improve its technology. These answers are undoubtedly informative for un- derstanding the mechanics of economic successes and failures of the postwar era But at some level they will also not have answered the central questions: how did South Korea and Singapore manage to grow, while Nigeria failed to take advantage of the growth opportunities? If physical capital accumulation is so important, why did Nigeria not invest more in physical capital? If education is so important, why did the Nigerians not invest more in their human capital? The answer to these questions is related to the fundamental causes of economic growth

Introduction to Modern Economic Growth construed) is necessary for understanding both the world-wide process of economic growth and cross-country differences. The role of technology in economic growth will be investigated in Chapter 3 and in later chapters. 1.7. From Correlates to Fundamental Causes The correlates of economic growth, such as physical capital, human capital and technology, will be our first topic of study. But these are only proximate causes of economic growth and economic success (even if we convince ourselves that there is a causal element the correlations shown above). It would not be entirely satisfac￾tory to explain the process of economic growth and cross-country differences with technology, physical capital and human capital, since presumably there are reasons for why technology, physical capital and human capital differ across countries. In particular, if these factors are so important in generating large cross country income differences and causing the takeoff into modern economic growth, why do certain societies fail to improve their technologies, invest more in physical capital, and ac￾cumulate more human capital? Let us return to Figure 1.8 to illustrate this point further. This figure shows that South Korea and Singapore have managed to grow at very rapid rates over the past 50 years, while Nigeria has failed to do so. We can try to explain the successful performance of South Korea and Singapore by looking at the correlates of economic growth–or at the proximate causes of economic growth. We can conclude, as many have done, that rapid capital accumulation has been was very important in gener￾ating these growth miracles, and debate the role of human capital and technology. We can blame the failure of Nigeria to grow on its inability to accumulate capital and to improve its technology. These answers are undoubtedly informative for un￾derstanding the mechanics of economic successes and failures of the postwar era. But at some level they will also not have answered the central questions: how did South Korea and Singapore manage to grow, while Nigeria failed to take advantage of the growth opportunities? If physical capital accumulation is so important, why did Nigeria not invest more in physical capital? If education is so important, why did the Nigerians not invest more in their human capital? The answer to these questions is related to the fundamental causes of economic growth. 26

INTRODUCTION TO MODERN ECONOMIC GROWTH We will refer to potential factors affecting why societies end up with differ ent technology and accumulation choices as the fundamental causes of economic growth. At some level, fundamental causes are the factors that enable us to link the questions of economic growth to the concerns of the rest of social sciences, and ask questions about the role of policies, institutions, culture and exogenous environmen- tal factors. At the risk of oversimplifying complex phenomena, we can think of the following list of potential fundamental causes: (i) luck(or multiple equilibria)that lead to divergent paths among societies with identical opportunities, preferences and market structures;(ii) geographic differences that affect the environment in which individuals live and that influence the productivity of agriculture, the availability of natural resources, certain constraints on individual behavior, or even individual attitudes;(iii) institutional differences that affect the laws and regulations und which individuals and firms function and thus shape the incentives they have accumulation, investment and trade; and(iv) cultural differences that determine individuals' values, preferences and beliefs. Chapter 4 will present a detailed discus- sion of the distinction between proximate and fundamental causes and what types of fundamental causes are more promising in explaining the process of economic growth and cross-country income differences For now, it is useful to briefly return to South Korea and Singapore versus Nige- ria,and ask the questions(even if we are not in a position to fully answer them yet): can we say that South Korea and Singapore owe their rapid growth to luck while Nigeria was unlucky? Can we relate the rapid growth of South Korea and Singapore to geographic factors? Can we relate them to institutions and policies? Can we find a major role for culture? Most detailed accounts of post-war economics and politics in these countries emphasize the growth-promoting policies in South Korea and Singapore- including the relative security of property rights and invest- ment incentives provided to firms. In contrast, Nigeria's postwar history is one of civil war, military coups, extreme corruption and an overall environment failing to provide incentives to businesses to invest and upgrade their technologies. It there- fore seems necessary to look for fundamental causes of economic growth that make contact with these facts and then provide coherent explanations for the divergent paths of these countries. Jumping ahead a little, it will already appear implausible 27

Introduction to Modern Economic Growth We will refer to potential factors affecting why societies end up with differ￾ent technology and accumulation choices as the fundamental causes of economic growth. At some level, fundamental causes are the factors that enable us to link the questions of economic growth to the concerns of the rest of social sciences, and ask questions about the role of policies, institutions, culture and exogenous environmen￾tal factors. At the risk of oversimplifying complex phenomena, we can think of the following list of potential fundamental causes: (i) luck (or multiple equilibria) that lead to divergent paths among societies with identical opportunities, preferences and market structures; (ii) geographic differences that affect the environment in which individuals live and that influence the productivity of agriculture, the availability of natural resources, certain constraints on individual behavior, or even individual attitudes; (iii) institutional differences that affect the laws and regulations under which individuals and firms function and thus shape the incentives they have for accumulation, investment and trade; and (iv) cultural differences that determine individuals’ values, preferences and beliefs. Chapter 4 will present a detailed discus￾sion of the distinction between proximate and fundamental causes and what types of fundamental causes are more promising in explaining the process of economic growth and cross-country income differences. For now, it is useful to briefly return to South Korea and Singapore versus Nige￾ria, and ask the questions (even if we are not in a position to fully answer them yet): can we say that South Korea and Singapore owe their rapid growth to luck, while Nigeria was unlucky? Can we relate the rapid growth of South Korea and Singapore to geographic factors? Can we relate them to institutions and policies? Can we find a major role for culture? Most detailed accounts of post-war economics and politics in these countries emphasize the growth-promoting policies in South Korea and Singapore– including the relative security of property rights and invest￾ment incentives provided to firms. In contrast, Nigeria’s postwar history is one of civil war, military coups, extreme corruption and an overall environment failing to provide incentives to businesses to invest and upgrade their technologies. It there￾fore seems necessary to look for fundamental causes of economic growth that make contact with these facts and then provide coherent explanations for the divergent paths of these countries. Jumping ahead a little, it will already appear implausible 27

INTRODUCTION TO MODERN ECONOMIC GROWTH that luck can be the major explanation. There were already significant differences between South Korea, Singapore in Nigeria at the beginning of the postwar era. It is also equally implausible to link the divergent fortunes of these countries to geo- graphic factors. After all, their geographies did not change, but the growth spurts of South Korea and Singapore started in the postwar era. Moreover, even if we can say that Singapore benefited from being an island, without hindsight one might have concluded that Nigeria had the best environment for growth, because of its rich oil reserves. Cultural differences across countries are likely to be important in many respects, and the rapid growth of many Asian countries is often linked to certain"Asian values". Nevertheless, cultural explanations are also unlikely to pro- vide the whole story when it comes to fundamental causes, since South Korean or Singaporean culture did not change much after the end of WwIl, while their rapid growth performances are distinctly post-war phenomena. Moreover, while South Korea grew rapidly, North Korea, whose inhabitants share the same culture and Asian values, had one of the most disastrous economic performances of the past 50 This admittedly quick(and perhaps partial) account suggests that we have to look at the fundamental causes of economic growth in institutions and policies that affect incentives to accumulate physical and human capital and improve technol ogy. Institutions and policies were favorable to economic growth in South Korea and Singapore, but not in Nigeria. Understanding the fundamental causes of eco- nomic growth is, in large part, about understanding the impact of these institutions and policies on economic incentives and why, for example, they have been growth nhancing in the former two countries. but not in Nigeria. The intimate link between fundamental causes and institutions highlighted by this discussion motivates the last part of the book, which is devoted to the political economy of growth, that is, to the study of how institutions affect growth and why they differ across countries One can then turn this around and argue that Nigeria is poor because of a"natural resource curse, i.e., precisely because it has abundant and valuable natural resources. But this is not an entirely compelling empirical argument, since there are other countries, such as Botswana, with abundant natural resources that have grown rapidly over the past 50 years. More important, the only plausible channel through which abundance of natural resources may lead to worse economic outcomes is related to institutional and political economy factors. This then takes us to the realm f institutional fundamental causes

Introduction to Modern Economic Growth that luck can be the major explanation. There were already significant differences between South Korea, Singapore in Nigeria at the beginning of the postwar era. It is also equally implausible to link the divergent fortunes of these countries to geo￾graphic factors. After all, their geographies did not change, but the growth spurts of South Korea and Singapore started in the postwar era. Moreover, even if we can say that Singapore benefited from being an island, without hindsight one might have concluded that Nigeria had the best environment for growth, because of its rich oil reserves.1 Cultural differences across countries are likely to be important in many respects, and the rapid growth of many Asian countries is often linked to certain “Asian values”. Nevertheless, cultural explanations are also unlikely to pro￾vide the whole story when it comes to fundamental causes, since South Korean or Singaporean culture did not change much after the end of WWII, while their rapid growth performances are distinctly post-war phenomena. Moreover, while South Korea grew rapidly, North Korea, whose inhabitants share the same culture and Asian values, had one of the most disastrous economic performances of the past 50 years. This admittedly quick (and perhaps partial) account suggests that we have to look at the fundamental causes of economic growth in institutions and policies that affect incentives to accumulate physical and human capital and improve technol￾ogy. Institutions and policies were favorable to economic growth in South Korea and Singapore, but not in Nigeria. Understanding the fundamental causes of eco￾nomic growth is, in large part, about understanding the impact of these institutions and policies on economic incentives and why, for example, they have been growth￾enhancing in the former two countries, but not in Nigeria. The intimate link between fundamental causes and institutions highlighted by this discussion motivates the last part of the book, which is devoted to the political economy of growth, that is, to the study of how institutions affect growth and why they differ across countries. 1One can then turn this around and argue that Nigeria is poor because of a “natural resource curse,” i.e., precisely because it has abundant and valuable natural resources. But this is not an entirely compelling empirical argument, since there are other countries, such as Botswana, with abundant natural resources that have grown rapidly over the past 50 years. More important, the only plausible channel through which abundance of natural resources may lead to worse economic outcomes is related to institutional and political economy factors. This then takes us to the realm of institutional fundamental causes. 28