If You're So Smart...
The Rich Nations Mystery
Which "Wood" You Choose?
The Rich Nations Mystery - Part 3
Now let's investigate
what factors increase productivity:
Read this segment from the World bank and think about these questions: What is GNP or GDP? What does "per capita" mean? What does a country need to do to grow and increase its GDP/GNP per capita?
From this reading, can you answer these questions?
Now let's answer
How can a country that has fewer natural resources produce more output per person than a country that has more natural resources? The answer: The key is productivity. Productivity depends on land (including all natural resources), capital (machines, tools, and technology), and labor (peoples' health, education, and work skills). Some rich countries have abundant natural resources, and some have relatively few; however, virtually all rich countries high levels of capital investment and technology, and a highly educated population. Almost all rich countries have a high degree of encourage trade and access to world markets.
International Research Project.
Let's explore several countries and find the factors that countries with high per capita GDP have in common, and the factors countries with low per capita GDP have in common.
or in teams explore these countries.
What factors make a nation rich?
Make a table with these along one side:
Here are some online sources to help you with your research: For a description of each economy including the GDP per capita, the growth rate, degree of market orientation, communication, transportation, infant mortality, life expectancy, literacy rate, openness to trade check the CIA World Factbook; https://www.cia.gov/library/publications/the-world-factbook/index.html
To find statistics on protection of property rights, economic freedom ratings, openness to trade, and limited government intervention, (1-5, with 1 being most desirable) go to the Index of Economic Freedom Rankings at the Heritage Foundation; www.heritage.org http://www.heritage.org/index/
another source of information on North America and Western Europe: http://www.unece.org/stats/trend/trend_h.htm
Please collect the data and complete the form for one country. Compare the results from your country with the results of other students. Rank the countries from highest GDP to lowest GDP. What features do the top 3 have in common? What features do the bottom 3 have in common? Why are some nations rich, and some nations poor?
Did high GDP per capita countries have
High levels of Economic Freedom?
government support of contracts and private property?
limited government intervention?
market oriented economies?
openness to trade?
low tax rates?
Compare these countries. Look at others. What do you think? List elements which seem to correlate with countries that have a higher standard of living. Why do you think that each element would contribute to higher productivity? Which would contribute to a higher standard of living? Adam Smith, a famous economist, had some thoughts on this topic. Do you think he would have expected your findings? See what he had to say: http://www.adamsmith.org/adam-smith/