4. The charts below show the growth of real GDP per capita in three pairs of geographically...
Question:
4. The charts below show the growth of real GDP per capita in three pairs of geographically adjacent countries: North and South Korea, Argentina and Chile, Zimbabwe and Botswana (using data from the Penn World Table).
Control of Corruption Government Effectiveness Political Stability and Absen ce of Violence Rule of Law Regulatory Quality Voice and Accountability South Korea 0.37 0.63 0.49 0.64 0.47 0.76 North Korea
−0.93 −1.10 −0.66 −1.08 −1.70 −2.02 Chile 1.56 1.34 0.85 1.31 1.38 0.56 Argentina −0.34 0.28 0.48 0.17 0.45 0.44 Botswana 1.02 0.98 0.90 0.67 0.79 0.78 Zimbabwe −0.87 −1.13 −1.21 −0.74 −1.61 −0.97
a. Which country in each pair experienced faster growth in GDP per capita? Which one is now richest?
b. The World Bank’s World Governance Indicators for each country in 2000 were as shown in the table (higher is better). Based on these data, do you think institutions can explain the divergent outcomes in these countries? Explain. Why do you think it helps to compare countries that are physically contiguous?
Step by Step Answer:
International Macroeconomics
ISBN: 9781319061722
4th Edition
Authors: Robert C Feenstra ,Alan M Taylor