Constraints to growth (main one)

12 flashcards · Economics · by Addaneye

1. What are the 10 constraints to growth?

   Poor education Poor infrastructure Poor healthcare Population growth Savings gaps Dead capital Corruption Being landlocked Infant industries Primary product dependency

2. How does poor education constrain growth?

   Poor human capital

3. How does poor infrastructure constrain growth?

   Increases transport costs

4. How does poor healthcare constrain growth?

   Makes workers less productive

5. How does population growth constrain growth?

   Can lead to overcrowding in schools and hospitals

6. How do savings gap constrain growth?

   Where there is a difference between the amount of money saved in banks and the amount of money required for loans >> banks can't lend as much

7. What is the Harrod-Domar model?

8. How does dead capital constrain growth?

   No property rights >> small firms can't take out loans >> lower investment

9. How does corruption constrain growth?

   Where government officials use public funds for private gains

10. How does being landlocked constrain growth?

    Countries have no coasts >> increase in transport costs

11. How do infant industries constrain growth?

    Industries are too young to benefit from economies of scale >> increase in costs of production for firms >> inward shift in SRAS

12. How do primary product dependency constrain growth?

    Price instability Prebisch-Singer hypothesis