Basic econ theory says poor countries should grow faster than rich ones. But for much of the Industrial Revolution, the opposite happened. https://www.econ.nyu.edu/user/debraj/Courses/Readings/Pritchett.pdf?seq=14 … Why? Probably because the first countries to discover industrial technologies used them to conquer the others!
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But then colonial empires went away. And yet still, for the next 30 years or so, poor countries fell further behind rich ones. https://dash.harvard.edu/bitstream/handle/1/3451299/Barro_Convergence.pdf?sequence=4 … Why?? Possible reasons: 1. Bad institutions (dictators, communism, autarkic trade regimes) 2. Civil wars 3. Lack of education
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But then, starting in the 80s (for China) and the 90s (for India and Indonesia), some of the biggest poor countries got their acts together and started to catch up!pic.twitter.com/3keorSFcE6
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Beginning in the 1990s, poor countries started to grow faster than rich ones. The pattern intensified in the 2000s.https://www.brookings.edu/opinions/the-future-of-economic-convergence/ …
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Outside of Africa, which was rocked by many huge wars in the 90s, the pattern was even stronger. Poor countries were catching up.https://twitter.com/HannesMalmberg1/status/1052002749762691073 …
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In the 90s, natural resource prices were low, so many resource exporters didn't get to join in the growth party. In the 00s that changed, as resource prices started rising.pic.twitter.com/soqwTTkv3X
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Then the Great Recession halted rich-country growth, but didn't halt poor-country growth.pic.twitter.com/OeSIlDNIVO
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Now, some economists are starting to entertain a wild, hopeful notion: What if the facts are finally catching up to basic economic theory??https://www.cgdev.org/blog/everything-you-know-about-cross-country-convergence-now-wrong …
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Now that growth theory finally (sort of) works, the world will be a changed place. Inequalities won't vanish for a long time. But no longer will a few rich countries get to lord it over the rest of the world. The days of colonialism are done for good. (end)pic.twitter.com/SsSmy0QagA
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Interesting, but how to make sense of Latin America?
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Latin America started out richer than other developing regions and so would be expected to converge less quickly...in addition, many Latin American countries are resource exporters, subject to the boom and bust cycle (and Resource Curse).
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In 1900, per capita incomes in Canada and Argentina were about the same. Now, per capita income in Argentina is 44% what it is in Canada. Solow doesn't explain that.
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This might have something to do with that https://en.m.wikipedia.org/wiki/Dirty_War
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Latin America has been subject to US Monroe Doctrine/anti-communist military interventions and meddling lasting into the 1990s at least. This puts them further behind the curve than, say, African countries who mostly gained complete independence in the 50s-60s imho.
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Do you think the trillion or so dollars Britain pilfered from India help fund Britain's industrialization and hinder India much?
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Then, yes. Now, no.
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People seem to forget just how much Europe took from their 'colonies' which funded massive innovation and also decimated existing infrastructure. India was quite advanced.
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Don’t forget US colonialism. US turned most of Caribbean and Latin America into subject states with monoculture farming and primitive economies in the 20th century, through use of force and capitalist advantage.
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