Question 1

What is the role of technology in catch-up growth?

Accepted Answer

The role of technology in catch-up growth is significant as it can help developing countries to bridge the gap with more advanced economies. Technology can enable these countries to leapfrog traditional stages of development by adopting and implementing advanced technologies and processes. This can lead to increased productivity, efficiency, and innovation, which are essential for catch-up growth.

Technology can also facilitate access to new markets, improve infrastructure, and enhance communication and information sharing. It can empower individuals and businesses to access global knowledge and resources, which can accelerate their development. Additionally, technology can support the development of new industries and sectors, creating opportunities for economic growth and diversification.

Overall, technology plays a crucial role in catch-up growth by providing the tools and resources necessary for developing countries to overcome their economic challenges and achieve sustainable development. It can help them to modernize and compete in the global economy, ultimately narrowing the gap with more advanced nations.

Question 2

Name and explain major fundamental factors of growth.

Accepted Answer

The major fundamental factors of growth can be categorized into three main areas: economic, social, and environmental.

Economic factors include things like investment in infrastructure, technological innovation, access to capital, and a stable and efficient regulatory environment. These factors are crucial for creating an environment where businesses can thrive and create jobs, leading to overall economic growth.

Social factors include things like education and healthcare. A well-educated and healthy population is better equipped to contribute to economic growth and innovation. Additionally, social factors also include things like political stability, social cohesion, and the rule of law, which are all important for creating a conducive environment for growth.

Environmental factors include things like access to natural resources, environmental sustainability, and climate change. A healthy environment is essential for long-term economic growth, and it is important to consider the impact of growth on the environment in order to ensure sustainable development.

Overall, these fundamental factors of growth are interconnected and mutually reinforcing. By addressing these factors, policymakers and businesses can create an environment that is conducive to sustainable and inclusive growth.

Question 3

Identify the 5 correct statements 
1. The term "Great Divergence" signifies the recent economic rise of China.
2. For cross-country comparisons of GDP per capita it is best to measure it in purchasing power parity dollars.
3. Culture is an important proximate factor of growth.
4. Chance can indeed be a fundamental factor of growth
5. Growth accounting aims at quantifying the contribution of the proximate factors to economic growth.
6. Labour productivity can only be increased by increases in total factor productivity (TFP).
7. TFP measures the impact of new capital investments on productivity.
8. For a full catch-up with a country at the technological frontier, technological catch-up will typically be accompanied by capital deepening.
9. The Environmental Kuznets Curve describes a potential empirical relation between per-capita income and the degree of pollution.
10. "Directed technological change" means that technical progress is controlled by the state.

Accepted Answer

2. For cross-country comparisons of GDP per capita it is best to measure it in purchasing power parity dollars.
4. Chance can indeed be a fundamental factor of growth
5. Growth accounting aims at quantifying the contribution of the proximate factors to economic growth
8. For a full catch-up with a country at the technological frontier, technological catch-up will typically be accompanied by capital deepening.
9. The Environmental Kuznets Curve describes a potential empirical relation between per-capita income and the degree of pollution.

Question 4

What are the proximate factors of economic growth?

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Question 5

Explain the concept of the Environmental Kuznets Curve and the impact of eco-innovation on it.

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Question 6

What is meant by "directed technological change"?

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Question 7

What is total factor productivity (TFP)?

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Question 8

Explain the concept of growth accounting.

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Question 9

What are the main drivers of labour productivity growth?

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Question 10

What do economic historians mean by the "Great Divergence"?

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Question 11

What is the difference between cross-country comparisons of GDP per capita in US dollars and so-called purchasing power dollars (aka international dollars)?

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Exam 2: Global Production