Geography, Climate, and Natural Resources - Chapter 15


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How does openness to international trade raise income per capita primarily through its effect on productivity?
Opennes facilitates technology transfer, leas to a more efficient organization of the economy, and raises income by allowing a country to specialize in the goods it is best at producing.
What is one of the determinants of openness to trade?
How does geography make a difference in a country's wealth?
If geography determines trade, and if trade helps a country grow rich, then some countries have a fundamental adantage over others.
What is the most important geographic determinant for a country?
It's proximity to the ocean
What do we know about GDP and distance to the ocean?
GDP per capita in areas that are within 60 miles of the sea is on average twice as high as GDP per capita in areas farther inland.
Another determinant of a country's openness to trade is:
its location with respect to major centers of economic activity.
A country's average cost of transporting imports correlates with:
differences in trade volume and income per capita
One possible explanation of clustering is spillovers. Explain.
A countries influence on their neighbors. more likely to trade with each other. wealthy countries also tend to spread jobs to their poor neighbors to take advantage of low wages. also privdes a positive example, a source for ideas to copy, and opportuntities for training.
A country's latitude has a strong relationship with its income per capita. What does this suggset?
because latitude is linked to climate, there is a role for climate in determining income per capita.
What else does climate depend on besides latitude?
prevailing weather systems, distance from the ocean, and altitude.
How does climate affect economic growth?
Direct effects on productivity, most importantly in agriculture. climate also influences the human input into production because the prevalence of disease is linked to climate and because people's ability to work is affected by temperature. It affects the economy by making a location more or less pleasant as a place to live.
Measures of agricultural output per worker differ greatly between tropical and temperate regions. how.
graph of country's latitude and productio per worker in agriculture. workers in wealthy, temperate countries producing as much as 300 times the agricultural output of workers in poor, tropical countries.
What are other factors that might explain the gap in agricultural output between tropical and temperate countries?
Differences between in the use of inputs to production such as agricultural machinery and fertilizers, the human capital of farmers, and the amount of land available per farmer.
Differences in agricultural productivity might result from differences in the institutional environment such as:
the quality of government, between tropical and nontropical countries.
How do tropical climates suffer from several disadvantages in producing useful crops?
The pattern of rain fall is not good for farming. falls in deluges that can erode the soil. the relative constancy of sunlight is less optimal for growing staple grains. Absence of frost.
Countries with better health enviornments will have heathier workers who produce more output, allowing for better nutrition and medicla care, which will further improve health.
if countries differ in their health environment, these differences will affect both income and actual health.
There is evidence that the tropics constitute a bad health environment.
tropical regions are rife with dieseases that are harmful to humans.
concentration of diseases in the tropics results from two factors:
1. regions where the temperature never reaches freezing support a much wider selection of parasites and disease carrying insects than to temperate zones. 2. reason on page 447.
Which of the tropical diseases has the largest effect on economic growth?
how does a hot warm climate affect the ability of people to work
well people in these climates cannot work too hard or they will overheat. people must work slowly if they are to survive because the evaporation of sweat cannot work to keep the body cool.
What is the resource curse?
that in the long run the presence of natural resources can actually impede economic growth
Booms in income from resource production tend to be temporary.
windfalls of income associated with resource booms seem to lead countries to raise their consumption levels that cannot be sustained once the boom ends.
Dynamics of industrialization
NR distort the structure of an economy in a way that produces short run benefits but long run costs. the shift to importing manufactured goods will cause the country's own manufacturing sector to contract. called the Dutch disease. 454.
the effecto of resources on a country's economic growth will depend crucially on the degree to which:
the degree to which the exploitation of a natural resource impedes or stimulates production in other sectors of the economy.
Backward linkages:
locally produced goods are used as inputs by the resource extraction industry,
forward linkages:
the natural resource is processed or used to produce other goods
small pockets of economic development that have almost no contact with the rest of the country's economy