LABOUR
FORCE
·
Increase in population can stimulate growth by
expanding domestic market.
·
Rise in participation rates among population of
working age
·
Quality of the labour force - human capital -
conducive to high productivity & real output
ENTREPRENEURSHIP
·
Entrepreneurial ability - organises and combines
other resources to make a profit.
·
The quantity of entrepreneurs - forces which
encourage entrepreneurial talent include:
·
A well-developed capital market, infrastructure
& favourable social & political climate
·
Quality of entrepreneurs improved by increasing
education & government assistance to business.
CAPITAL
STOCK
·
Importance of gross and net investment
·
Quality of investment as important at quantity
·
Positive externality effects from higher investment
(increasing returns to scale?)
Government
Policies And Economic Growth
- Open
markets - internal and external competition in markets for goods and
services
- Promotion
of liberal capital market providing a flow of liquidity to finance
investment
- Protection
of private property rights
- Scale
of government spending - possible crowding out of the private sector if
government spending is too
- Efficiency
of the tax and benefit system - may create disincentives which constrains
the active labour supply
- Incentives
for entrepreneurial activity
- Investment
in human capital - active labour market policies
- Macro-economic
stability and credibility of macro economic policy
Young,
1994, Asian tiger's success resulted from:
·
Rapid accumulation of capital (through high
investment)
·
Labour (through population growth and increased
labour-force participation)
·
Government policies of encouraging education,
opening economy to foreign technologies, promoting trade, keeping taxes low
& encouraging savings (30% of GDP in 'tiger' economies)
Small state - government spending around 20% of
GDP compared to over 50% in Europe
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