The understanding of
economic growth often focuses on boom periods. However, perhaps rather than
focusing on the growth periods of an economy, we should be focusing on the
recessions. A study by Broadberry and Wallis found that the continued economic
growth across countries of all income levels was better explained by shorter,
and less substantial recession periods, and less so by the size of the large
growth periods.
Basically, this shows
that due to the protections built into our economies, and our general respect
for the law, recessions are less severe than they once were. Although, this article suggests that we may not be able to rely on our current stability to
continue. “Before the modern era, elites would fight
between themselves for the spoils of growth and send the economy back to square
one through wars, corruption and the like. Respect for courts to resolve
disputes prevents this from happening. With populist politicians challenging
the authority of judges once again across the world, that is food for thought.”
Does the concept of
recessions defining our growth rather than boom periods contradict Gordon?
I'd say it has less to do with refuting Gordon, and more to do with the statement that minimizing losses is just as important as maximizing growth. It's a lot nicer when you only take one step backward for your three forward than taking two.
ReplyDeleteI agree with Ryan. Part of recovering from a recession entails having the resources, institutions and skilled labor force to make it happen. Such factors are characteric of a growing nation.
ReplyDeleteI agree with both Chido and Ryan. Human capital, resources and institutions are key factors of contributing a growing country.
ReplyDeleteI think that in order to recover from a recession, we have to focus and strengthen on the main components that allow us to grow as well as diminish the components that hurt our economy. Like what 朱竞璨 said, a few key factors that help a growing country are natural resources, technology, and physical capital.
ReplyDelete