The Role of Structure and Demand
Chapter 1: Divisions in the world economy and the importance of economic growth
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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