Is war necessary for economic growth

3 Pages
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Department
Economics
Course Code
ECON 104
Professor
Robert Pollin

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Joseph Francis Short Paper Assignment #4 “David Colander highlights five factors as determinants of economic growth— what he terms “growth compatible institutions;” investment and capital accumulation;  available resources; technological development; and entrepreneurship.   By contrast,  Ruttan poses the provocative question, “Is War Necessary For Economic Growth?”   His  answer suggests that, in his view, industrial policies are necessary for economic growth.    How, if at all, can we reconcile these alternative perspectives?” There are many ways an economy can grow and improve in order to gain more  capital or even become self­sufficient. According to Colander, economic growth occurs  because of five factors. These five factors are growth compatible institutions, investment  and capital accumulation, available resources, technological development and  entrepreneurship. However more importantly, out of the five factors, growth compatible  institutions often bring the most issues. One example of a growth compatible institution  would be the institution of property rights. Without private property or property rights  people wouldn’t have the incentive to invest capital and other assets that essentially make  our economy grow. However the problems growth compatible institutions bring is that  they make it hard to measure individual’s contribution. Also one of the main problems is  the inequality versus the growth. The only people that can afford to invest in private  property rights are those who can afford it. Which brings us back to the term, “You need  money to make money.” However if we look back into the history of our economy to the  years or 1950 and 1960 we see that much has changed in the way our economy grows.  [Type text] [Type text] [Type text] On the other hand Ruttan has a strong belief that war is needed in order for  economic growth. However when we make this statement he doesn’t mean literal war.  What he is actually referring to is that industrial policies are necessar
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