Firstly, authorexplained that we can find reasons of growth of economy by analyzing actions ofcountry during the certain period of time. Also, he said that all economistsoften make an accent on certain parts of economy, whereas it is better to lookat the economy as whole, in order to understand how economy is functioning andthen analyze it step by step. For example, when people look at the machine,they divide it into two parts – left and right, while they should first look atthe condition of machine and then deepen.
Further, author discussed about neoclassical theory of growth and newtheory of growth. In his mind, neoclassical theory of growth states thateverything works well and technologies are public goods, whereas in real lifeit wasn’t true. The main thing in new growth theory was that inputs ofproduction can be divided into two groups – ideas and thing.
Ideas arenon-rival good and they can be sold as well as things – rival goods. Usingideas and things it can be explained how economy growth. Then, author justexplained why America’s economy grew and why it was growing relatively fasterthan others. There are several reasons. One of them is that from the beginningUSA had a lot of resources and they used them in the right way. Also, America’spopulation was growing well.
Moreover, they had a technological progress andprogress in infrastructure of country (railways, logistic). Many authorsexplained reasons why America was better than others – scale effect,relationships with other countries and etc. There is no doubt that US economy insome aspects was worse than some countries – production of metals was lowerthan in Britain. However, in general, it became a leader in most industries. Finally, author concludes that there were alot of different inventions and the scale effect was not the main thing.However, scientists will explain the reasons of growth and why was it first inAmerica only when theories will blend with conclusions and evidence.
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