Past, Present and Future
Edited by D. S.P. Rao and Bart van Ark
Chapter 7: Making the International System Work for the Platinum Age
The most important questions in economics are about why economies grow as fast or slowly as they do, and why some economies grow faster than others. Small differences in economic performance sustained over long periods generate huge differences in the distribution of economic welfare and in economic and, eventually, political power. These overwhelmingly important questions affecting human economic life are neglected by the deductive methods which dominate modern economics. The deduction of logical conclusions from narrowly specified assumptions provides few insights into the ultimate sources – the institutions and values – of differences in economic growth between countries and over time. These insights come especially from the careful study of economic history. The importance of particular institutions comes to be understood through the association of differences in economic performance with changes and differences in institutional structures. These associations are identified from careful numerical study of economic performance. The starting point is the careful marshalling of data. In Maddison’s words: ‘Without measurement, judgements on why some countries got rich, why others are poor, why some catch up and others fall behind, are bound to be fuzzy. Quantification sharpens scholarly discussion and contributes to the dynamics of Quantification sharpens scholarly discussio the research process’ (Maddison, 2002, p.1).
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