Economic growth and economic development 50

Introduction to Modern Economic Growth
Another example of rapid economic growth with falling real wages is provided by
the experience of the Mexican economy in the early 20th century. See G´omezGalvarriato (1998). There is also evidence that during this period, the average
height of the population might be declining as well, which is often associated with
falling living standards, see L´opez Alonso, Moramay and Porras Condy (2003).
There is a major debate on the role of technology and capital accumulation in the
growth experiences of East Asian nations, particularly South Korea and Singapore.
See Young (1994) for the argument that increases in physical capital and labor
inputs explain almost all of the rapid growth in these two countries. See Klenow
and Rodriguez-Clare (1996) and Hsieh (2001) for the opposite point of view.
The difference between proximate and fundamental causes will be discussed further in later chapters. This distinction is emphasized in a different context by
Diamond (1996), though it is implicitly present in North and Thomas’s (1973) classic book. It is discussed in detail in the context of long-run economic development
and economic growth in Acemoglu, Johnson and Robinson (2006). We will revisit
these issues in greater detail in Chapter 4.

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