Sources of Growth Thorvaldur Gylfason Washington, DC 14-25 August 2006.

Sources of Sources of GrowthGrowth

Thorvaldur GylfasonThorvaldur GylfasonWashington, DCWashington, DC

14-25 August 200614-25 August 2006

OutlineI.I. Pictures of growthPictures of growthII.II. Determinants of growthDeterminants of growth

1.1. Saving and investmentSaving and investment2.2. EfficiencyEfficiency

a)a) LiberalizationLiberalizationb)b) StabilizationStabilizationc)c) PrivatizationPrivatizationd)d) EducationEducatione)e) DiversificationDiversificationf)f) InstitutionsInstitutions

III.III. Empirical evidence of growthEmpirical evidence of growth

Economic growth: The short run vs. the long run

Time

Nati

on

al eco

nom

ic o

utp

ut

Actual output

Potential output

Business cyclesin the short run

Economic growthin the long run

Downswing

Upswing

Growing together, growing apart

TimeTime

Nati

on

al eco

nom

ic o

utp

ut

ou

tpu

t

Rapid growth

Slow growth

West-Germany : East-GermanyWest-Germany : East-GermanyAustria : Czech RepublicAustria : Czech RepublicFinland : EstoniaFinland : EstoniaTaiwan : ChinaTaiwan : ChinaSouth Korea : North KoreaSouth Korea : North Korea

Botswana : NigeriaBotswana : NigeriaKenya : TanzaniaKenya : TanzaniaThailand : BurmaThailand : BurmaTunisia : MoroccoTunisia : MoroccoSpain : ArgentinaSpain : ArgentinaMauritius : MadagascarMauritius : Madagascar

Economic system

Economic policy?

Growing apart

YearsYears

Outp

ut

per

cap

ita

Outp

ut

per

cap

ita

Case B: 2% a yearCase B: 2% a year

Case A: 0.4% a yearCase A: 0.4% a year

Aspects of efficiencyAspects of efficiency

Economic systemEconomic system

Economic policyEconomic policyThreefold Threefold difference after difference after 60 years60 years

00 6060

China China – Europe: Europe:

1:1 in 14001:1 in 1400

1:20 in 19891:20 in 1989

Sources Sources of of growth: growth: Investment and Investment and educationeducation

In ves tm en t E d u ca tion

G row th

+ +

+denotes a positive effect in the direction shown

In ves tm en t E d u ca tion

G row th

+ +


Adam Smith knew this, and more, as did Arthur Lewis

Sources of Sources of growth: growth: Investment and Investment and educationeducation

Solow raised Solow raised

doubts on doubts on

long-run long-run

linkageslinkages

More More sources sources of growthof growth

In ves tm en t x E d u ca tion

G row th+ +


+

Arthur Lewis: x is trade, stable politics, good weather

But Solow carried the day: long-run growth is exogenous!

The Neoclassical Theory of Exogenous Economic Growth

Traces the rate of growth of output per capita to a single source:

Technological progressTechnological progress

Hence, economic growth in the long run is immune to economic policy, good or bad

“To change the rate of growth of real output per head you have to change the rate of technical progress.”

ROBERT M. SOLOW

The New Theory of Endogenous Economic Growth

Traces the rate of growth of output Traces the rate of growth of output per capita to three main sources:per capita to three main sources:

SavingSaving

EfficiencyEfficiency

DepreciationDepreciation

“The proximate causes of economic growth are the effort to economize, the accumulation of knowledge, and the accumulation of capital.”

W. ARTHUR LEWIS

Endogenous Growth in the Endogenous Growth in the Harrod-Domar ModelHarrod-Domar Model

You may recognize the You may recognize the endogenous growth model endogenous growth model as a reinterpretation of the as a reinterpretation of the Harrod-Domar modelHarrod-Domar modelwhere growth depends onwhere growth depends on

A.A. the saving rate the saving rate

B.B. the capital/output ratio the capital/output ratio

C.C. the depreciation rate the depreciation rate

You may recognize the You may recognize the endogenous growth model endogenous growth model as a reinterpretation of the as a reinterpretation of the Harrod-Domar modelHarrod-Domar modelwhere growth depends onwhere growth depends on

A.A. the saving rate the saving rate

B.B. the capital/output ratio the capital/output ratio

C.C. the depreciation rate the depreciation rate

A Simple Model of Endogenous Growth

Four building blocksFour building blocks S = IS = I

Saving equals investment in equilibrium Saving equals investment in equilibrium

S = sYS = sY Saving is proportional to incomeSaving is proportional to income

I = I = K + K + KK Investment involves addition to capital stockInvestment involves addition to capital stock

Y = EKY = EK Output depends on quality and quantity of Output depends on quality and quantity of

capital capital


Let’s do the arithmetic:Let’s do the arithmetic:

S = sY = I = S = sY = I = K + K + K K

= = Y/E + Y/E + Y/E Y/E

Rearranging terms we find Rearranging terms we find

Y/E = sY - Y/E = sY - Y/EY/E

Multiplying by Multiplying by EE and dividing by and dividing by YY gives gives Y/Y = sE - Y/Y = sE -


Bottom lineBottom line g = sE - g = sE -

Rate of economic growth equalsRate of economic growth equals Saving rateSaving rate

timestimes

EfficiencyEfficiency (i.e., the output/capital ratio)(i.e., the output/capital ratio)minusminus

DepreciationDepreciation

sEg

Three implications for growthThree implications for growth

0ds

dg

0dE

dg

0ddg

Saving is good for growthSaving is good for growth

Efficiency helps growthEfficiency helps growth

Depreciation hurts growthDepreciation hurts growth

What this meansWhat this means

Botswana and Nigeria: GDP per capita 1960-2002 (1995 USD)

Case 1

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1960

1964

1968

1972

1976

1980

1984

1988

1992

1996

2000

Botswana

Nigeria

Nenadi Usman, Nenadi Usman,

Nigeria’s finance Nigeria’s finance

minister: minister:

Oil has made us lazyOil has made us lazy

Botswana Botswana

6.3%6.3%

Nigeria Nigeria 0.2%0.2%

(1.061)(1.061)4242 = 12.0 = 12.0

Spain and Argentina: GDP per capita 1960-2002 (1995 USD)

Case 2

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

1960

1964

1968

1972

1976

1980

1984

1988

1992

1996

2000

Spain

Argentina

Spain 3.3%Spain 3.3%

Argentina 0.6%Argentina 0.6%

(1.027)(1.027)4242 = 3.1 = 3.1

Madagascar and Mauritius: GDP per capita 1960-2002 (1995 USD)

Case 3

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1960

1964

1968

1972

1976

1980

1984

1988

1992

1996

2000

Mauritius

Madagascar

Mauritius Mauritius

4.4%4.4%

Madagascar -Madagascar -

1.4%1.4%

(1.058)(1.058)4242 = 10.7 = 10.7

Country Country AA

Country BCountry B

A Tale of Two Countries

Country Country AA

Country BCountry B

Girls at primary Girls at primary schoolschool

100%100% 72%72%


Country Country AA

Country BCountry B


100%100% 72%72%

Investment ratioInvestment ratio 25%25% 11%11%


Country Country AA

Country BCountry B


100%100% 72%72%

Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%


Country Country AA

Country BCountry B


100%100% 72%72%

Investment ratioInvestment ratio 25%25% 11%11%Export ratioExport ratio 58%58% 23%23%Primary export Primary export ratioratio

33%33% 80%80%


Country Country AA

Country BCountry B


100%100% 72%72%


33%33% 80%80%

InflationInflation 10%10% 18%18%


Country Country AA

Country BCountry B


100%100% 72%72%


33%33% 80%80%

InflationInflation 10%10% 18%18%Growth per capita Growth per capita 1960-20021960-2002

4.4%4.4% -1.4%-1.4%


And the countries And the countries are:are: MauritiusMauritius MadagascMadagasc

arar


100%100% 72%72%


33%33% 80%80%

InflationInflation 10%10% 18%18%Growth per capita Growth per capita 1960-20021960-2002

4.4%4.4% -1.4%-1.4%


Madagascar and Mauritius: GDP per capita 1960-2002 (1995 USD)

Case 3

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1960

1964

1968

1972

1976

1980

1984

1988

1992

1996

2000

Mauritius

Madagascar

Mauritius Mauritius

4.4%4.4%

Madagascar -Madagascar -

1.4%1.4%

(1.058)(1.058)4242 = 10.7 = 10.7

Exogenous vs. endogenous growth

The neoclassical viewThe neoclassical viewthat economic growth in the long run is that economic growth in the long run is

merely a matter of merely a matter of technologytechnology does not does not throw much light on the impressive growth throw much light on the impressive growth performance of Asia since the 1960s, or on performance of Asia since the 1960s, or on growth differentialsgrowth differentials

The new viewThe new viewthat long-run growth depends on that long-run growth depends on savingsaving and and

efficiency efficiency is more illuminatingis more illuminating

Besides, it’s not really new, because Adam Besides, it’s not really new, because Adam Smith knew this (1776) Smith knew this (1776)

Sources of endogenous growth I

Saving Saving Fits real world Fits real world experienceexperience quite well quite well

No coincidence that, in East Asia, saving rates of No coincidence that, in East Asia, saving rates of 30-30-40%40% of GDP went along with rapid economic growth of GDP went along with rapid economic growth

No coincidence either that many African economies with No coincidence either that many African economies with saving rates around saving rates around 10%10% of GDP have been stagnant of GDP have been stagnant

OECD countries: saving rates of about OECD countries: saving rates of about 20%20% of GDP of GDP

Important implication for Important implication for economic policyeconomic policy::Economic stability with Economic stability with low inflationlow inflation and positive real and positive real

interest rates spurs saving, which is interest rates spurs saving, which is good for growthgood for growth

Investment and economic growth

Jordan

Botswana

Thailand

-8

-6

-4

-2

0

2

4

6

0 5 10 15 20 25 30 35

Investment 1965-98 (% of GDP)

Gro

wth

of

GN

P p

er c

apit

a 19

65-9

8, a

dju

sted

fo

r in

itia

l in

com

e (%

per

yea

r)r = 0.65

An increase in

investment by

4% of GDP is

associated with

an increase in

per capita

growth by 1%

per year 85 countries85 countries

4%1%

Botswana

China

NicaraguaNiger

Quantity and quality

What is the empirical evidence?

Sources of endogenous growth II

EfficiencyEfficiencyAlso fits real world experience quite wellAlso fits real world experience quite well

Technical progress is good for growth because it allows Technical progress is good for growth because it allows us to us to squeeze more output out of given inputssqueeze more output out of given inputs

And that is exactly what increased And that is exactly what increased efficiencyefficiency is all is all about! about!

Thus, technology is best viewed as an aspect of general Thus, technology is best viewed as an aspect of general economic efficiency economic efficiency

Important implication for Important implication for economic policyeconomic policy::Everything that increases economic efficiency, no matter Everything that increases economic efficiency, no matter

what, is also what, is also good for growthgood for growth


Sources of increased efficiencySources of increased efficiency1.1. LiberalizationLiberalization of prices and trade increases of prices and trade increases

efficiency, which is efficiency, which is good for growthgood for growth

2.2. StabilizationStabilization reduces the inefficiency associated with reduces the inefficiency associated with inflation, which is inflation, which is good for growthgood for growth

3.3. PrivatizationPrivatization reduces the inefficiency associated with reduces the inefficiency associated with state-owned enterprises, which …state-owned enterprises, which …

4.4. EducationEducation makes the labor force more efficient makes the labor force more efficient

5.5. Technological progressTechnological progress also enhances efficiency also enhances efficiency

The possibilities are virtually endless!The possibilities are virtually endless!


This is This is good newsgood newsIf growth were merely a matter of technology, we If growth were merely a matter of technology, we

would not be able to do much about it …would not be able to do much about it …… … except to follow technology-friendly policies by except to follow technology-friendly policies by

supporting supporting R&DR&D and such and such

But if growth depends on saving and efficiency, But if growth depends on saving and efficiency, there are things that we there are things that we can docan do, in the private , in the private sector as well as through the public sector, to sector as well as through the public sector, to foster rapid economic growthfoster rapid economic growth

Because Because everything that is good for saving and everything that is good for saving and efficiency is also efficiency is also good for growthgood for growth

Liberalization and economic growth

Liberalization of pricesLiberalization of prices means that markets, means that markets, not bureaucrats, are allowed to set prices not bureaucrats, are allowed to set prices Mixed market economy is Mixed market economy is more efficientmore efficient than than

central planningcentral planning Compare former Soviet Union with the US and Compare former Soviet Union with the US and

EuropeEurope

Liberalization of tradeLiberalization of trade allows specialization allows specialization according to comparative advantageaccording to comparative advantageFree trade is Free trade is more efficientmore efficient than self-sufficiency than self-sufficiency

North Korea and Cuba vs. South Korea and North Korea and Cuba vs. South Korea and SingaporeSingapore

Applies to trade in goods, services, capitalApplies to trade in goods, services, capital

1

Darkness in North-Korea

China

Japan

Exports and growth 1965-98

-6

-4

-2

0

2

4

6

8

0 20 40 60 80

Exports 1965-98 (% of GDP)

Gro

wth

per

cap

ita 1

965-9

8, ad

juste

d f

or

siz

e

(% p

er

year)

An increase in exports

by 20% of GDP is

associated with an

increase in per capita

growth by 1% per year

r = 0.33


8877 countriescountries

Stabilization and economic growth

Stabilization of pricesStabilization of prices means that distortions means that distortions associated with inflation are reducedassociated with inflation are reduced InflationInflation distorts the choice between real and financial distorts the choice between real and financial

capital by punishing money holdings, and thus capital by punishing money holdings, and thus creates creates inefficiency inefficiency in productionin production

Inflation thus involves a tax, the Inflation thus involves a tax, the inflation taxinflation tax An An inefficient taxinefficient tax compared with most other taxes compared with most other taxes

Inflation also creates Inflation also creates uncertainlyuncertainly which tends to which tends to discourage trade and investment discourage trade and investment

Inflation also tends to result in Inflation also tends to result in overvaluationovervaluation of of currency, thus hurting exports and growthcurrency, thus hurting exports and growth

2

Model 1

Inflation Inflation distortiodistortionn

--2.512.51(2.07)

Natural Natural resourceresourcess

Initial Initial incomeincome

InvestmInvestmentent

SecondaSecondary ry educatioeducationn

PopulatiPopulation on growthgrowth

Adj. RAdj. R22 0.04

Stabilization and economic growth: Regression results

Note: 87 countries, method is OLS, t-statistics are shown in parentheses.

Inflation distortion = /(1+ /(1+

) ) Inflation impedes

growth


Table 1. Regression results on economic growth

Model 1

Model 2


-2.51(2.07)

-2.46(2.37)


--0.090.09(5.7(5.75)5)





Adj. RAdj. R22 0.04 0.30


Natural resource

curse


Model 1

Model 2

Model 3


-2.51(2.07)

-2.46(2.37)

-2.26(2.25)


-0.09(5.75)

-0.10(6.52)


--0.450.45(2.6(2.67)7)




Adj. RAdj. R22 0.04 0.30 0.35


Convergence


Model 1

Model 2

Model 3

Model 4


-2.51(2.07)

-2.46(2.37)

-2.26(2.25)

-1.95(2.25)


-0.09(5.75)

-0.10(6.52)

-0.07(5.01)


-0.45(2.67)

-0.45(3.05)


0.150.15(5.4(5.41)1)SecondaSeconda

ry ry educatioeducationn


Adj. RAdj. R22 0.04 0.30 0.35 0.51


Investment is good for

growth


Model 1

Model 2

Model 3

Model 4

Model 5


-2.51(2.07)

-2.46(2.37)

-2.26(2.25)

-1.95(2.25)

-1.97(2.49)


-0.09(5.75)

-0.10(6.52)

-0.07(5.01)

-0.04(2.93)


-0.45(2.67)

-0.45(3.05)

-1.10(5.39)


0.15(5.41)

0.09(3.36)


1.241.24(4.2(4.24)4)PopulatiPopulati

on on growthgrowth

Adj. RAdj. R22 0.04 0.30 0.35 0.51 0.60


Education boosts

growth


Model 1

Model 2

Model 3

Model 4

Model 5

Model 6


-2.51(2.07)

-2.46(2.37)

-2.26(2.25)

-1.95(2.25)

-1.97(2.49)

-1.61(2.14)


-0.09(5.75)

-0.10(6.52)

-0.07(5.01)

-0.04(2.93)

-0.04(2.49)


-0.45(2.67)

-0.45(3.05)

-1.10(5.39)

-1.27(6.42)


0.15(5.41)

0.09(3.36)

0.10(3.74)

SecondaSecondary ry educatioeducation*n*

1.24(4.24)

1.07(3.82)


--0.560.56(3.4(3.42)2)

Adj. RAdj. R22 0.04 0.30 0.35 0.51 0.60 0.64


* An increase in secondary-school enrolment by a third increases growth by 1%.

Population

drag

Privatization and economic growth

PrivatizationPrivatization means that profit-oriented means that profit-oriented owners and able managers are allowed to owners and able managers are allowed to direct enterprisesdirect enterprisesProfit motiveProfit motive replaces political considerations replaces political considerations

as the guiding principle of business operationsas the guiding principle of business operationsProfit-maximizing owners generally want to appoint Profit-maximizing owners generally want to appoint

managers and staff on merit rather than on the managers and staff on merit rather than on the basis of political connections, for examplebasis of political connections, for example

Private enterprise is generally Private enterprise is generally more efficientmore efficient than state-owned enterprisesthan state-owned enterprises

3

State-owned enterprises and economic growth

-6

-4

-2

0

2

4

6

8

.0 .1 .2 .3 .4

Share of SOEs in employment 1978-91 (%)

Gro

wth

of

GN

P p

er

cap

ita 1

97

8-9

2 (

%)

38 38 countriescountries

r = -0.35

Education, health, and economic growth

EducationEducation means a better trained and hence means a better trained and hence more efficientmore efficient work force work force Need to provide primary and secondary education Need to provide primary and secondary education

to all, especially femalesto all, especially females Need to provide tertiary education to a greatly Need to provide tertiary education to a greatly

increased number of peopleincreased number of people Need increased public commitment to educationNeed increased public commitment to education This requires both increased This requires both increased public expenditurepublic expenditure on on

education and probably also increased scope for education and probably also increased scope for private sector involvementprivate sector involvement in education in education

4

Same story time and again

Free trade Free trade is good for growth is good for growth Reduces the inefficiency that results from Reduces the inefficiency that results from

restrictions on trade restrictions on trade

Price stabilityPrice stability is good for growth is good for growth Reduces inefficiency resulting from inflationReduces inefficiency resulting from inflation

PrivatizationPrivatization is good for growth is good for growth Reduces inefficiency resulting from SOEsReduces inefficiency resulting from SOEs

EducationEducation is good for growth is good for growth Reduces the inefficiency that results from Reduces the inefficiency that results from

inadequate educationinadequate education

Growth and education, 1965-98

-8

-6

-4

-2

0

2

4

6

0 20 40 60 80 100 120

Secondary enrolment 1980-97 (% of cohort)

Gro

wth

of

GN

P p

er

cap

ita 1

965-9

8, ad

juste

d

for

init

ial in

co

me (

% p

er

year)

An increase in secondary-

school enrolment by 25% of

each cohort goes along with

an increase in per capita

growth by 1% per year

Positive but

decreasing returnsdecreasing returns to

education

r = 0.72

87 87 countriescountries

Finland

Thailand

New Zealand

Jamaica


Natural resourcesNatural resources and and economic growtheconomic growth

Natural resources, if not well Natural resources, if not well managed, may turn out to be, managed, may turn out to be, at best, a at best, a mixed blessingmixed blessing

Four possible channelsFour possible channels Dutch disease (foreign capital)Dutch disease (foreign capital) Rent seeking (social capital)Rent seeking (social capital) Education (human capital) Education (human capital) Investment (real capital)Investment (real capital)

5

Recent literatureRecent literature

Four main linkages, again 1. Dutch disease

Hurts level or composition of exports and FDI

2. Rent seeking Protectionism, corruption, oppression

3. Education False sense of security Poor quality of policies and institutions

4. Investment

In ves tm en t

In it ia l In com e N atu ra l C ap ita l

x E d u ca tion

G row th+

+

+––

––

Enter Enter natural natural resourcesresources

?

Natural resource abundance hurtsNatural resource abundance hurts investment investment and and educationeducation, and hence also growth, and hence also growth

Dutch disease

Rent seeking

Natural capital and economic growth


-8

-6

-4

-2

0

2

4

6

0 20 40 60

Share of natural capital in national wealth 1994 (%)

Gro

wth

of

GN

P p

er

cap

ita 1

965-9

8, ad

juste

d

for

init

ial in

co

me (

%)

An increase in the

natural capital share

by 8% goes along with

a decrease in per

capita growth by 1%

per year

r = -0.64

Venezuela

Australia

85 countries85 countries

6 Inequality and economic growth

Two views:Two views:1.1. Inequality is Inequality is goodgood for growth for growth

Too much equality weakens Too much equality weakens incentives to work, save, and incentives to work, save, and acquire an educationacquire an education

2.2. Inequality is Inequality is badbad for growth for growth Too much inequality reduces social Too much inequality reduces social

cohesion and creates conflictcohesion and creates conflict

What is the empirical evidence?What is the empirical evidence?

One more thing

Growth and inequality, 1965-98

Sweden

Thailand

Central African Republic

South Africa

France

Brazil

Equality is Equality is good for good for growthgrowth: : No visible No visible sign that sign that equality equality stands in stands in the way of the way of economic economic growthgrowth

Korea

Lesotho

-6

-4

-2

0

2

4

6

0 10 20 30 40 50 60 70

Gini index of inequality

Gro

wth

of

GN

P p

er c

apit

a 19

65-9

8, a

dju

sted

fo

r in

itia

l in

com

e (%

per

yea

r)


r = -0.50

Korea

China

Brazil

South Africa

Sierra Leone

Norway

An increase in Gini index

by 12 points goes along

with a decrease in per

capita growth by almost

1% per year

7 Democracy and economic growth

Two views:Two views:1.1. Democracy is Democracy is goodgood for growth for growth

Facilitates change of governmentFacilitates change of government Makes it easier to replace bad Makes it easier to replace bad

governments with better onesgovernments with better ones

2.2. Democracy is Democracy is badbad for growth for growth Too much democracy interferes Too much democracy interferes

with farsighted policy making by with farsighted policy making by playing into the hands of pressure playing into the hands of pressure groups and suchgroups and such

What is the empirical evidence?What is the empirical evidence?

Institutions

Growth and political liberties, 1965-98

Central African Republic

Brazil

DemocracDemocracy is good y is good for growthfor growth: : No visible No visible sign that sign that democracy democracy stands in stands in the way of the way of economic economic growthgrowth


-8

-6

-4

-2

0

2

4

6

0 2 4 6 8

Index of political liberties 1972-90

Gro

wth

of

GN

P p

er c

apit

a 19

65-9

8, a

dju

sted

fo

r in

itia

l in

com

e (%

per

yea

r)

r = -0.62

Botswana

China

Niger

Venezuela

Korea

An increase in

the political

liberties index

by 2 points goes

along with an

increase in per

capita growth by

over 1% per

year

UK = 1UK = 1India = 2India = 2Botswana = Botswana =

22

What is the upshot?What is the upshot?

Economic growth responds to Economic growth responds to public policypublic policy

In particular, by encouragingIn particular, by encouragingsaving and saving and investmentinvestment of high of high

qualityqualityforeign foreign tradetrade and investment and investmenteducationeducationeconomic diversificationeconomic diversificationsound institutionssound institutions

... the government can help foster ... the government can help foster rapid rapid economic growtheconomic growth

Sir Arthur Lewis got it Sir Arthur Lewis got it rightright

Since the second world Since the second world war it has become war it has become quite clear that rapid quite clear that rapid economic growth is economic growth is available to those available to those countries with countries with adequate natural adequate natural resources which resources which make make the effort to achieve itthe effort to achieve it..

W. ARTHUR LEWISW. ARTHUR LEWIS(Accra, 1968)(Accra, 1968)

ReservationsReservationsEven so, the question of rapid growth is, Even so, the question of rapid growth is,

of course, a bit more complicatedof course, a bit more complicatedWe also need to address a host of We also need to address a host of

politicalpolitical, , socialsocial,, and and culturalcultural questions questions as well as questions of as well as questions of naturalnatural conditions, climate, and public health conditions, climate, and public health — which would take us too far afield

But the main point remains:But the main point remains:To grow or not to growTo grow or not to grow is in large measure is in large measure

a a matter of choicematter of choiceMany of the constraints on growth are Many of the constraints on growth are man-man-

mademade, and can be removed, and can be removed

To grow or not to grow is in large measure a matter of choice

To grow or not to grow is in large measure a matter of choice

These slides – and more! – can be viewed on my website: www.hi.is/~gylfason

Conclusion: Conclusion: It can It can be donebe done

The EndThe End

Sources of Growth Thorvaldur Gylfason Washington, DC 14-25 August 2006.

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Transcript of Sources of Growth Thorvaldur Gylfason Washington, DC 14-25 August 2006.