What is the “Reversal of Fortune”? Does this phenomenon refute the claim that countries with poor geography are destined for development failure?
What is the “Reversal of Fortune”? Does this phenomenon refute the claim that countries with poor geography are destined for development failure?
Disparities in national economic growth rates are frequently due to differences in inputs (factors of production) and TFP—the productivity of labor and capital resources. Higher productivity fosters quicker economic growth, which helps a country to overcome poverty.
It is often assumed that affluent nations are becoming richer, while impoverished ones are becoming poorer by the day. The fundamental cause of this imbalance is uneven resource allocation and utilization.
According to Acemoglu, Johnson, and Robinson, the world income distribution witnessed a "Reversal of Fortune" from 1500 to the present, in which formerly affluent nations in what is now the developing world became impoverished and poor countries got rich.
Step by step
Solved in 2 steps
