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.
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). …show more content…
“Technology is the technical means for the production of goods and services.” (Krugman, Wells, Graddy, p.617) Nowadays people can produce more than in the past without physical capital or human capital, because technology has advanced. New technology helps people in work, makes it much easier than before.
Natural researches and development
“Scientific advances make new technology possible.” To discover new technology people have to do research and development. Countries those are rich in natural resources, such as mineral deposits or highly fertile land have higher real GDP per capita than less lucky countries. The most important research is made by the government. For example in the recent years, Brazil has improved a lot especially in agriculture. This positive result is depending on exploiting a natural resource. One of the Brazilian land it is well know about the cerrado. But until the quarter of century this land was not suitable for faming. But then “the Brazilian Enterprise for Agricultural and Livestock Research, a government agency, developed the crucial technology. To adding crucial nutrients would allow crops to be grown to previously unusable land and also develop new varieties of soya beans and breeds of cattle that flourish in Brazil’s tropical climate.” (Krugman, Wells, Graddy, p627). It shows that new development makes land