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Determinants of long-term economic growth. Economic systems Economic policies Economic institutions. Explaining why growth rates differ. Questions. - PowerPoint PPT Presentation

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  • Determinants of long-termeconomic growthEconomic systemsEconomic policiesEconomic institutionsExplaining why growth rates differ

  • QuestionsIf the economic systems adopted by two countries are not completely different, is it nonetheless possible to trace the differences in their economic performance to their different economic policies?

    Or does technology dictate growth differentials in such cases?

    Or perhaps geography?

    Or history?

    Or all of the above?

  • Examination of economic growth in theory and practiceGrowth performance of four pairs or clusters of countries since 1970

    Low- and middle-income countriesBut most of the points to emerge apply to high-income countries as well

    Those economies have developed quite differently over the past 30-40 years despite roughly comparable initial conditions

  • The four clustersThailand and Burma

    Botswana, Nigeria, and Ghana

    Uruguay, Argentina, and Spain

    Madagascar and Mauritius

  • Burma and ThailandBurma1962: General Ne Win came to powervictorious march towards socialismself-reliancebut active client of IMF 1970s: respectable growthrising investmentcentrally planned poor qualitystagnant export1980s: something had gone seriously wrongThailandrising export ratiostrong saving and investment performancebanking system strongly influenced by politicians quality of investment questionablestrong education record1960-1994: GNP per capita increased by more than 5% per year on average compared with 1% in Burma

  • Burma and Thailand: GNP per capita, 1960-1994 (constant 1987 US$, 1960=100)

    Chart2

    100.0000030281100.0000126106

    98.2260222281102.3013134117

    98.9558603794106.9194518131

    108.6580139749112.5951634083

    99.0587311791116.741542639

    107.9648237956122.6619734251

    101.0254663466132.3527349271

    92.5112831651139.3823721584

    100.5107381039146.170122696

    102.0310336877151.2789892165

    104.9196751885163.1376090063

    106.0474541945166.2413239468

    106.3039855637168.4115168634

    104.2553822163180.2899991278

    107.4458353263184.3334534853

    108.9953921259185.1356373792

    113.2721892183198.1401336621

    117.4992104356211.5240508917

    122.5470965615226.3890817293

    126.2841222354229.9023513149

    133.3938026308236.5553357413

    138.8701130251242.6637271676

    143.7872416371251.2360116076

    148.3638018025264.683037054

    151.9081112199273.5268881363

    152.8212203041279.776175079

    148.2665763453289.5497229041

    138.8513579833312.7209985513

    120.4709672821348.7792745294

    121.8650004016386.0115394795

    122.8918467811424.3861361133

    118.8096261606451.2927509852

    127.2408881537477.2435318982

    133.1146213187510.4415605371

    138.6215557443549.2089772295

    Burma

    Thailand

    Fig.1.2-1.5

    19701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995

    Argentina1,2101,3901,4701,8002,4502,6802,3702,2302,1802,5602,8902,7902,6102,8102,8302,6603,0203,6003,9402,9503,2703,9206,1107,2608,1608,0301.8930.0761.079

    Uruguay7208409209801,1501,4101,4401,4301,6202,1702,9303,6303,1902,0401,6801,5001,7702,2002,5002,6002,6002,9103,5004,0104,6905,1701.9710.0791.082

    Spain1,1001,2201,4701,9302,5303,0103,1803,3703,7304,6205,6905,7705,2204,4904,2404,2104,9906,5608,7009,86011,22012,56014,31013,79013,34013,5802.5130.1011.106

    GDP deflator (1987 = 100)3537394245505356616673798488919597100104108113117120122124128

    19701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995

    Botswana1301501902503803904604805707009401,1901,1701,1101,0701,0201,0501,2301,5301,9002,2702,6202,9902,8302,8503,0203.1450.1261.134

    Ghana2502702602803203002903103604004304203703303503604004204304004004304604304103900.4450.0181.018

    Nigeria1702102703204405306807808109901,1801,1601,0909309301,0007204403803403303203102702802600.4250.0171.017

    19701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995

    Madagascar1701701802102603002903003103904604203903603203003002802602302302102302402302300.3020.0121.012

    Mauritius3404305907108609301,0201,2301,2401,2801,1801,0601,0301,0601,2601,6202,0702,2202,4402,6102,9603,0803,1803,3802.2970.1001.105

    19701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995

    Thailand2102202202703403904204605306107207707707808008108409601,1701,3301,5201,6901,9202,1402,4002,7402.5690.1031.108

    &A

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    Fig.1.2-1.5

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    Argentina

    Uruguay

    Spain

    Figure 1.3. Argentina, Uruguay, and Spain, 1970-1995: GNP Per Capita (Current USD, Atlas Method)

    Fig.1.1

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    Botswana

    Ghana

    Nigeria

    Figure 1.2. Botswana, Ghana, and Nigeria, 1970-1995: GNP Per Capita (Current USD, Atlas Method)

    Sheet3

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    Madagascar

    Mauritius

    Figure 1.4. Madagascar and Mauritius, 1970-1995: GNP Per Capita (Current USD, Atlas Method)

    Sheet4

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    Thailand

    Figure 1.2. Thailand, 1970-1995: GNP Per Capita (USD, Atlas Method)

    Sheet5

    19601961196219631964196519661967196819691970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994

    Burma100.000003028198.226022228198.9558603794108.658013974999.0587311791107.9648237956101.025466346692.5112831651100.5107381039102.0310336877104.9196751885106.0474541945106.3039855637104.2553822163107.4458353263108.9953921259113.2721892183117.4992104356122.5470965615126.2841222354133.3938026308138.8701130251143.7872416371148.3638018025151.9081112199152.8212203041148.2665763453138.8513579833120.4709672821121.8650004016122.8918467811118.8096261606127.2408881537133.1146213187138.6215557443

    MMRThailand100.0000126106102.3013134117106.9194518131112.5951634083116.741542639122.6619734251132.3527349271139.3823721584146.170122696151.2789892165163.1376090063166.2413239468168.4115168634180.2899991278184.3334534853185.1356373792198.1401336621211.5240508917226.3890817293229.9023513149236.5553357413242.6637271676251.2360116076264.683037054273.5268881363279.776175079289.5497229041312.7209985513348.7792745294386.0115394795424.3861361133451.2927509852477.2435318982510.4415605371549.2089772295

    NY GNP MKTP KD 87GNP at market prices (con.87 US$)4,180,796,9284,194,248,9604,315,566,0804,839,795,2004,506,365,9525,016,315,9044,802,737,1524,499,959,8085,002,442,2405,195,860,9925,466,860,0325,655,524,8645,802,477,0565,824,436,2246,143,794,1766,378,915,8406,770,291,2007,172,400,1287,639,733,7608,040,243,2008,673,649,6649,220,316,1609,748,281,34410,270,850,04810,738,169,85611,030,720,51210,934,970,36810,463,540,2249,276,093,4409,587,731,4569,879,026,6889,757,114,36810,675,179,52011,413,040,12812,140,779,520

    SP POP TOTLPopulation, total21,746,00022,209,97022,683,84023,167,84023,662,14024,167,01024,727,39025,300,80025,887,49026,487,78027,102,00027,739,14028,391,23029,058,67029,741,81030,441,01031,088,83031,750,45032,426,16033,116,22033,821,00834,534,83235,263,71236,007,98036,767,96837,544,00038,361,42039,196,64040,050,04840,922,03241,813,00842,715,95243,638,40044,596,00045,555,008

    THAThailand1921891902091902081941781931962022042042002072102182262362432562672762852922942852672322342362282452562671.32

    NY GNP MKTP KD 87GNP at market prices (con.87 US$)7,980,567,0408,411,643,9049,057,796,0969,827,697,66410,498,410,49611,365,130,24012,646,769,66413,735,270,40014,854,920,19215,855,240,19217,633,189,88818,500,630,52819,297,019,90421,269,690,36822,390,540,28823,153,760,25625,391,409,15227,775,180,80030,460,379,13631,696,119,80833,417,840,64034,858,901,50436,698,980,35239,315,300,35241,314,140,16042,970,730,49645,221,859,32849,664,450,56056,325,169,15263,389,220,86470,866,272,25676,630,220,80082,403,393,53689,621,946,36897,514,741,760

    SP POP TOTLPopulation, total26,392,00027,191,82028,015,89028,864,94029,739,71030,641,01031,599,87032,588,77033,608,59234,660,34035,745,00836,803,24837,892,83239,014,68840,169,74041,359,00842,379,22043,424,59244,495,74045,593,32846,718,00047,505,88848,307,07249,121,78049,950,20850,792,62051,649,23252,520,30053,406,04854,306,74055,222,62056,153,95257,100,99258,064,00058,718,000

    3023093233403533714004214424574935035095455575605996406856957157347608008278468769461055116712831365144315441661

    BurmaGDP(kyat)2896929675293903015530958322413420736242386044060943831466184923051393542525598955397531784709550561

    kyat/$4.76194.79165.45654.92834.85986.36766.76737.11946.88446.65386.59837.28077.79038.03558.38558.47497.33046.65356.39456.7049

    GDP($)60836193538661196370506350555091560761036643640363196396647066067557799273657541

    224223190211214166163160173184196185179178176176197204184184

    &A

    Page &P

    Sheet5

    100.0000030281100.000

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