ECON 100 Lecture Notes - Lecture 12: Planned Economy, Human Capital
Document Summary
The economic growth model an help explain one of the most striking events of the twentieth century- the economic collapse of the soviet union: centrally planned economy: where the government owned nearly every business and made all production. Technological innovations just happen- they are not based on economics (i. e. , they occur randomly) Wealth comes from capital and modern technology. Two specific types of aid developed during the 1950s and 1960s to implement this approach. First, actual capital goods were built with aid from developed nations. Second, billions of dollars of international aid went to developing nations to help them fund investment in infrastructure such as highways, bridges, and modern ports, as well as other types of capital. Growth theory (why are institutions the key to economic growth?) Growth theory has been spurred by the belief that some economies grow faster for reasons particular to those economies. Growth is endogenous: sustained through technological innovation, but these innovations do not occur randomly.
