Comparison of GDP between rich and other countries.

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Based off of the article, what three poverty traps help explain the plight of nations comprising the poorest billion people? Explain in 10 sentences min. Article: The Poorest Billion Not long ago, the world was one-sixth rich and five-sixths poor. Now, thanks to impressive growth in places like China, the world is more like one-sixth rich, two-thirds not rich but improving, and one-sixth poor and going nowhere. Most developing economies are experiencing a rising standard of living. But that still leaves about a billion people trapped in economies that are not only extremely poor, but stagnant or getting worse. All told, about 45 countries fit into this poorest-billion category, including 30 countries in sub-Saharan Africa plus the likes of Cambodia, Haiti, Laos, Myanmar, North Korea, and Yemen. Economist Paul Collier, of Oxford University in England, has examined what went wrong with these “trapped countries.” Based on decades of research, he identifies some poverty traps. About 750…

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Chapter 12, Problem 2CQQ

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Comparison of GDP between rich and other countries.

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Based off of the article, what three poverty traps help explain the plight of nations comprising the poorest billion people? Explain in 10 sentences min. Article: The Poorest Billion Not long ago, the world was one-sixth rich and five-sixths poor. Now, thanks to impressive growth in places like China, the world is more like one-sixth rich, two-thirds not rich but improving, and one-sixth poor and going nowhere. Most developing economies are experiencing a rising standard of living. But that still leaves about a billion people trapped in economies that are not only extremely poor, but stagnant or getting worse. All told, about 45 countries fit into this poorest-billion category, including 30 countries in sub-Saharan Africa plus the likes of Cambodia, Haiti, Laos, Myanmar, North Korea, and Yemen. Economist Paul Collier, of Oxford University in England, has examined what went wrong with these “trapped countries.” Based on decades of research, he identifies some poverty traps. About 750…

1. Haiti is one of the poorest countries in the world. Suppose you were asked to be an advisor to the policymakers of Haiti. Please briefly discuss two policies that you would recommend to them to promote economic development in their country.

The Importance of Productivity Two well-known economists, William Baumol and Alan Blinder, have stated that, in the long run, “nothing contributes more to reduction of poverty, to increases in leisure, and to the country’s ability to finance education, public health, environmental improvement and the arts” (1991, 356) than the rate of growth of productivity. 1. Define productivity. 2. See if you can verify Baumol and Blinder’s very strong claim (“nothing contributes more ...”) through the following exercise. Assume GDP in the United States is $10 trillion and that the labor force remains constant in size and fully employed. Estimate the value of GDP in one year’s time if productivity growth is 3%. What if it were only 2%? How much will GDP fall in two years’ time if productivity growth remains at 2% rather than 3%? In three years? 3. Why might environmental regulation reduce productivity growth? 4. Why might it increase…