- Language: English
- 152 Pages
- Published: June 2012
- Region: North America, United States
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Sources of Economic Growth. Edition No. 1
- Published: February 2012
- Region: Global
- 164 Pages
- VDM Publishing House
We first show that TFP is not only essential for long-run growth but also important for a developing economy to escape from a potential poverty trap. Then we present a model with 3 stages of growth: first the country concentrates on production of consumption goods; next it requires the country to import both physical capital to produce consumption goods and new technology capital to produce new technology; and finally, the country needs to import new technology capital and invest in the training and education of high skilled labor. Chapter 3 shows that long-run economic growth can be sustained by learning-by-doing, however the growth based purely on learning-by-doing is constrained by labor growth rate. In chapter 4 we study a developing non-renewable natural resource producer. The domestic technology is convex-concave, so that the economy may be locked into a poverty trap. We show that the extent to which the country will escape from the poverty trap depends on: the interactions between technology and impatience; the characteristics of the resource revenue function, the level of its initial stock of capital, and the abundance of the natural resource.
Thilagavathi Shanmuganathan has a PhD in Discourse Analysis and is currently a senior lecturer at the Department of English Language, Faculty of Languages and Linguistics, University of Malaya. She has presented papers at national and international conferences. She has also published in various journals.