Barriers to Economic Growth

INTRODUCTION

Summary: Last class we learned about the factors that spur economic growth and development. Today we will learn about conditions that are barriers to that.

Inquiry Question: What factors serve as barriers to economic growth and development?

HOMEWORK DUE TODAY

Listen to this podcast. Focus on this question as you listen: How do new ideas differ from changes in the capital stock in regard to their effects on economic growth?

ASSESSMENTS AND ACTIVITIES

  1. Formative Assessment: You will have an assessment at the beginning of class. There will be three questions. I will use this rubric to assess your work.

    • Question #1 will be from my lecture (content knowledge).

    • Question #2 will be based on the podcast you listened to for homework (critical thinking).

    • Question #3 will require you to transfer what you've learned to a new problem (creativity).

  2. Lecture: The Barriers to Economic Development (You will have to download this to your computer.)

WORK DUE NEXT CLASS

Listen to this podcast. Focus on this question as you listen: How do institutions affect economic growth and development according to Acemoglu?

Daron Acemoglu of MIT and author (with James Robinson) of Why Nations Fail talks with EconTalk host Russ Roberts about the ideas in his book: why some nations fail and others succeed, why some nations grow over time and sustain that growth, while others grow and then stagnate. Acemoglu draws on an exceptionally rich set of examples over space and time to argue that differences in institutions--political governance and the inclusiveness of the political and economic system--explain the differences in economics success across nations and over time. Acemoglu also discusses how institutions evolve and the critical role institutional change plays in economic success or failure. Along the way, he explains why previous explanations for national economic success are inadequate. The conversation closes with a discussion of the implications of the arguments for foreign aid and attempts by the wealthy nations to help nations that are poor.