CAS EC 102 Lecture Notes - Lecture 9: Low Countries, Hong Kong, Financial Capital

• School: Boston University
• Department: Economics
• Course: CAS EC 102
• Professor: Bruce Watson

Document Summary

Low k stock high mpk high returns to investment higher domestic savings higher returns to __________ Rich countries growth is on higher side of graph. Low countries growth is on lower side of graph. If it holds and it is a true theory then: Ex) hong kong, japan and italy have started out poor and grown very rapidly. It is the idea that poor countries will catch up to richer countires depending on something else. We can find out using 3 approaches to development. -inaccessibility of trade routes (landlocked countries) (a lot of poorest countries are landlocked like africa. *main idea is that if you are located in an unfortunate part of the world: you face problems you cannot grow and develop on your own: you need lots of foreign aid. Jeff sachs: focused on foreign aid in promoting economic growth: international trade approach. 2 dimensions of integration into the world economy: trade in goods and services.