Why Some Economies Grow Faster Than Others
Why Some Economies Grow Faster Than Others
A Comparison of Cuba and Israel
Harry M. Geedey
Professor Evelyn Bolden
Economics 250
March 1, 2011
Abstract The governments of Cuba and Israel are relatively young. The two countries are of similar size, population, and possess similar natural resources. They each have port cities with easy access to the world. Their governments were founded on socialist principles. Despite the similarities, the economic performance of Israel has far outpaced Cuba’s. This paper will examine the reasons behind the disparate economic performance of countries, and then specifically examine the economies of Israel and Cuba.
Why Some Economies Grow Faster Than Others There are many reasons why some economies grow faster than others. Let’s begin with the things that aren’t in the control of individuals or governments. Geography plays an important role in economic growth. It is more difficult to ship and receive goods in landlocked countries. Extremely hot or extremely cold climates limit the amount of human exertion possible and require more inputs in the form of heating and air conditioning. Economies that have an abundance of water, valuable minerals, arable land, and oil also have a significant advantage over those that lack natural resources. Ceteris paribus, most economists would agree that the next most important element of economic growth is a market oriented economy. The things that are necessary to facilitate a smooth transition to a market economy follow. People must have the freedom to seek utility and produce goods and services. Individuals must also have the right to own property, and the opportunity to succeed or fail. Economic growth will be diminished if individuals do not have the right to own property and the opportunity to succeed. Individuals must also be educated to the extent that they can assess the utility of various goods and services and choose the ones that
A Comparison of Cuba and Israel
Harry M. Geedey
Professor Evelyn Bolden
Economics 250
March 1, 2011
Abstract The governments of Cuba and Israel are relatively young. The two countries are of similar size, population, and possess similar natural resources. They each have port cities with easy access to the world. Their governments were founded on socialist principles. Despite the similarities, the economic performance of Israel has far outpaced Cuba’s. This paper will examine the reasons behind the disparate economic performance of countries, and then specifically examine the economies of Israel and Cuba.
Why Some Economies Grow Faster Than Others There are many reasons why some economies grow faster than others. Let’s begin with the things that aren’t in the control of individuals or governments. Geography plays an important role in economic growth. It is more difficult to ship and receive goods in landlocked countries. Extremely hot or extremely cold climates limit the amount of human exertion possible and require more inputs in the form of heating and air conditioning. Economies that have an abundance of water, valuable minerals, arable land, and oil also have a significant advantage over those that lack natural resources. Ceteris paribus, most economists would agree that the next most important element of economic growth is a market oriented economy. The things that are necessary to facilitate a smooth transition to a market economy follow. People must have the freedom to seek utility and produce goods and services. Individuals must also have the right to own property, and the opportunity to succeed or fail. Economic growth will be diminished if individuals do not have the right to own property and the opportunity to succeed. Individuals must also be educated to the extent that they can assess the utility of various goods and services and choose the ones that
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