Economic growth and economic development 39

.06

Introduction to Modern Economic Growth

KOR
HKG

average growth gdp per capita 1960-2000
-.02
0
.02
.04

THA
CHN
IRL
BRB

PRT
COG

IDN

ESP
GRC

PAK

NPL

MLI

ITA

DOM
BRA
INDSYR
EGY
TUR
IRN

ZWE

MWI
DZA
UGAGTM
GHA
BGD KEN

GMB
CMR
BEN
BDI
TGO
RWA
SEN

LKA
LSO
COL MEX
PRY

ECU
JOR
CRI

SLV
HND

JPN

MUS MYS

ZAF
PER

JAM

ISL
FRA

AUT
FIN ISR NOR
BEL
NLD

CHL
TTO
PAN

GBR

CAN
DNK AUS
SWE

USA

CHE

PHL
URY

NZL
ARG

BOL

VEN
ZMB

MOZ
NIC
NER

0

2

4
6
average schooling 1960-2000

8

10

Figure 1.17

least in part, by omitted factors affecting both investment and schooling on the one
hand and economic growth on the other.
We will investigate the role of physical and human capital in economic growth
further in Chapter 3. One of the major points that will emerge from our analysis
there is that focusing only on physical and human capital is not sufficient. Both
to understand the process of sustained economic growth and to account for large
cross-country differences in income, we also need to understand why societies differ
in the efficiency with which they use their physical and human capital. We normally
use the shorthand expression “technology” to capture factors other than physical
and human capital affecting economic growth and performance (and we will do so
throughout the book). It is therefore important to remember that technology differences across countries include both genuine differences in the techniques and in
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