ECON-200 Lecture Notes - Lecture 6: Foreign Portfolio Investment, Human Capital, International Trade
Document Summary
Catch-up effect: countries that start off poor tend to grow more rapidly than countries that start off rich. Even small amounts of capital investment (increases worker"s productivity. Another way for a country to invest in new capital. Capital investment that is owned and operated by a foreign entity. Investment financed with foreign money but operated by domestic residents. Ex: russians buying stocks in u. s. businesses. Gap between wages of educated and uneducated workers. Public education=large subsidies in human capital investment. Protect property rights is the ability of people to exercise authority over the resources they own. Avoid interaction with the rest of the world. Integrate interaction with the rest of the world. Amount of trade is determined by government policy and geography. More workers to produce goods and services. Larger total output of goods and services. Larger population is most likely to dilute productivity. Malthus-an ever increasing population will keep the majority of society in poverty.
