Ch13-HW

1) What is the difference between measures of labor productivity and GDP per Capita?

 

2)  Read this excerpt from William Easterly’s The Elusive Quest for Growth. What could the electric engine have in common with the personal computer?

 

3)  Consider the following data on Cameroon, Austria, and the United States in 1960 and 2000. By what percentage did each country grow in the period? Did Austria and Cameroon converge to US income levels? Would you expect them to?

    

Country

Year

GDP/Capita

Cameroon

1960

1680

Cameroon

2000

2042

Austria

1960

7337

Austria

2000

23676

USA

1960

12273

USA

2000

33293

 

 

4) Economists argue that governments must create and maintain proper incentives for people (and firms) to pursue growth promoting activities. Visit InfoTrac from the library’s web page to read the following articles (both from May 21, 2005), and explain how Robert Mugabe’s policies have destroyed productivity.

·        “As Country Heads for Disaster, Zimbabwe Calls for Return of White Farmers,” The Guardian

·        “Zimbabwe, Long Destitute, Teeters Toward Ruin,” The New York Times

 

5) We have already seen that Ireland has had a remarkable growth story. Let’s now analyze it in more detail.

A) According to these two articles from The Economist (1987, 1988) in the late 1980s, what were the major problems facing Ireland? How might they hamper growth potential?

B) According to this 2004 article, what contributed to Irish growth? Why is the suggested “biggest contribution” an unsatisfactory explanation for the primary (or initial) cause of growth?

 

6) Refer to Growth-HW.xls. This is an Excel file with data on countries’ GDP per Capita relative to the US for 1965 and 2000. You will need to use both the “Data” and “Chart” tabs in this problem. Note that in the chart, each point represents a different country. Some of the countries have been identified with red triangles and labeled A, B, C, D, and E. For each of these points, answer the following:

     i.   What country does the point represent?

     ii.  Did the country have a higher or lower GDP per Capita than the US in 1965?

iii.    Did the country have a higher or lower GDP per Capita than the US in 2000?

iv.   Did the country’s GDP per Capita grow faster or slower than the US’s during this time period?