Difference Between Economic Growth And Economic Development

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Economics 515
Midterm 1

1. Economic growth vs. economic development, define extensive growth & intensive growth

Economic growth is the sustained increase in the output of goods/services of a society.
Economic development is economic growth plus changes in technical and institutional arrangements by with output are produced.

Extensive growth- increase in output due to increase in inputs (labor force grows, land stock increases)
Intensive growth- increase in output per unit of input – productivity increases (technological change)

2. List 2 data sources researchers use to estimate historical standards of living; three indicators of economic development other than National Income measures of interest to economists

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Of the Greeks? Of the Romans?

Phoenician- 1st merchants and colonists, independent city-states, mercantile peoples, alphabet, foster trade-established colonies, sailors/skillful merchants-sailed Atlantic for tin and may have circumnavigated of Africa

Greeks- originally cultivators, fertile agricultural regions-grain, served as markets/trade centers---market system, grapes/olives=wine/oil (more valuable), potters/metal workers, sailors/merchants, banking, insurance, joint-stock ventures, COINAGE-standard of account, medium of exchange

Romans- originally agricultural people, freedom of enterprise/didn’t penalize commercial activities, strict enforcement of contracts/property rights, coherent legal framework for economic activity in empire, PAX ROMANA- long period of peace and order in Mediterranean basin-allowed commerce to develop under most favorable conditions (little to no piracy and brigandage)

8. What is meant by technological stagnation, “an Overdose of Slavery” be the cause, 2 flaws of the slavery explanation, provide an alternative explanation.

Technological stagnation
 Short list of new products in the 1500 yrs of Greek/Roman rule
 Not too impressive refinements of existing technology
 Little application of water0mill power using aqueducts

Slavery explanation
 Slave labor cheap = no incentive for elites to replace human pwr with machine pwr,
 Slaves had