The Mystery Of Economic Growth Essay

The Mystery Of Economic Growth Essay

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“In 2010, the prestigious Nemmers Prize in Economics, awarded biennially to recognize work of lasting significance, was given to Helpman for fundamental contributions to the understanding of modern international economics and the effects of political institutions on trade policy and economic growth” (Clement, 2012). “The Mystery of Economic Growth” that was written by Elhanan Helpman provides a non-technical description of growth economics over the last half of a century. This paper will connect theory to data of four major countries United States, French, Australia, and Japan. The principle that emerges from “The Mystery of Economic Growth” is that long term growth comes from innovation and adoption of technology in an economy. Four outlooks that Elhanan Helpman has on economic growth that are relevant in his book are able to help readers connect theory to countries and see why economies behave the way they do. First, Innovation of technology with new techniques of production helps globalization. Second, the gain of human capital for the explanation of growth rates in different counties. Third, Total Factor Productivity of knowledge leads to greater prosperity and economic growth in a country. Fourth, economic intuitions play a role in economic growth by implementing policies. The next paragraphs will relate these outlooks from Helpman and compare them to the economies of the United States, French, Australia, and Japan. Innovation of technology, gain of human wealth, knowledge growth, and implanting policy all play a role in the economic growth of countries.
What We Should Expect
GDP per capita in different countries varies across the globe. While growth rates of GDP per capita vary, it is not always the poorest cou...


... middle of paper ...


... Australia, and Japan many key facts begin to show themselves. Each one of the countries has had an increase over the last decade and has shown economic growth in many different sectors. The United States GDP per capita for instance has grown from 39,682 in 2003 to 53,143 in 2013 (The World Bank, 2014). But the main question is how this is occurring in economies. Helpman has described this by relating theories to try and explain this. According to Helpman the role of trade links countries together and creates diffusion between the two countries. Spillovers of R&D can happen from richer countries to poorer countries but this can create a larger divergence because the benefits for the poorer countries is less than the ones for the richer countries. The United States high-technology export rose from 162,082,323,849 in 2002 to 148,772,488,404 in 2012.
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