Economic Growth in an Open Developing Economy

Economic Growth in an Open Developing Economy

The Role of Structure and Demand

A. P. Thirlwall

This concise yet insightful sequel to the highly acclaimed The Nature of Economic Growth provides a comprehensive critique of both old and new growth theory, highlighting the importance of economic growth for reducing poverty.

Chapter 1: Divisions in the world economy and the importance of economic growth

A. P. Thirlwall

Subjects: development studies, development economics, economics and finance, development economics, post-keynesian economics


The well-known American economist, Robert Lucas, remarked in a book a few years ago: ‘Once one starts to think about [economic growth] it is hard to think of anything else [because] the consequences for human welfare involved are simply staggering’ (Lucas, 2002, p. 5). He is right. It is not possible to understand the deep divisions in living standards in the world economy today without reference to the growth experience of countries in the past; and it is not possible to tackle world poverty today without faster income growth in the poorest countries. Income growth may not be a sufficient condition for poverty reduction, if all the benefits accrue to the better off, but it is certainly a necessary condition. A redistribution of the existing level of the national income of poor countries would make only a small dent in the total level of poverty.

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