Why Some Countries Richer Than Others
Using economic theory explain why some countries are richer than others.
Abstract
This paper tries to analyze why some countries are richer than others. Economic theory is used to identify the different factors affecting countries to be richer or poorer.
Introduction
One of the fundamental questions regarding the world during all the time is why some counties are richer than others. How is it possible that there are some countries in 21st century, where families cannot feed their children, where education, medical care and simple things which are necessary for everyday life does not exist. And why does still more than half of the world population live worse than people who lived in the UK in 1900. (Krugman,Wells, Graddy, p. 611). Figure 1 shows the Gross National Income per Capita at 2007. It shows that lots of countries have very low national income, especially the African countries. Furthermore it shows that Europe, North America and Australia have the highest national income. The question is why this big difference? Economic growth is measured using real GDP per capita. “If economic growth is to give an indication of an increase in living standards, it has to be measured per head of the population.” (Sloman, Wride, p.256). Long run economic growth depends almost entirely on one ingredient, rising productivity. ”Overall GDP can grow because of population growth, but any large increase in real GDP per capita must be the result of increased output per worker.” (Krugman,Wells, Graddy , p 616) A number of factors affect the growth of productivity. Productivity equals real GDP by number of people working.
This essay tries to analyze why there is this difference between living standards of countries and uses economic theory to explain it.
Figure 1
Physical Capital
“Physical capital consist of human-made resources such as building or machine” (Krugman, Wells, Graddy, p.616) Physical capital helps to make the life of people easier and makes people
Abstract
This paper tries to analyze why some countries are richer than others. Economic theory is used to identify the different factors affecting countries to be richer or poorer.
Introduction
One of the fundamental questions regarding the world during all the time is why some counties are richer than others. How is it possible that there are some countries in 21st century, where families cannot feed their children, where education, medical care and simple things which are necessary for everyday life does not exist. And why does still more than half of the world population live worse than people who lived in the UK in 1900. (Krugman,Wells, Graddy, p. 611). Figure 1 shows the Gross National Income per Capita at 2007. It shows that lots of countries have very low national income, especially the African countries. Furthermore it shows that Europe, North America and Australia have the highest national income. The question is why this big difference? Economic growth is measured using real GDP per capita. “If economic growth is to give an indication of an increase in living standards, it has to be measured per head of the population.” (Sloman, Wride, p.256). Long run economic growth depends almost entirely on one ingredient, rising productivity. ”Overall GDP can grow because of population growth, but any large increase in real GDP per capita must be the result of increased output per worker.” (Krugman,Wells, Graddy , p 616) A number of factors affect the growth of productivity. Productivity equals real GDP by number of people working.
This essay tries to analyze why there is this difference between living standards of countries and uses economic theory to explain it.
Figure 1
Physical Capital
“Physical capital consist of human-made resources such as building or machine” (Krugman, Wells, Graddy, p.616) Physical capital helps to make the life of people easier and makes people
Bibliography: Books: John Sloman, Alison Wride, (2009), Economics, (7th edition), Pearson Custom Publishing Paul Krugman, Robin Wells, Kathryn Graddy ,(2008), Economics, (European Edition), Worth Publisher Articles: http://www.aneki.com/poorest.html http://en.wikipedia.org/wiki/Education_in_the_Democratic_Republic_of_the_Congo http://www.econguru.com/wp-content/uploads/2009/01/gdp-ppp-per-capita-worldmap-2008-cia-factbook-thumb.png http://www.esquire.com/features/best-and-brightest-2009/world-poverty-map-1209 http://www.financialjesus.com/how-to-get-rich/top-10-worlds-richest-countries/2/ http://newsimg.bbc.co.uk/media/images/41673000/gif/_41673830_arizona_nogales3_map203.gif