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African Development Report 2015 - Chapter 6: Structural transformation, agriculture and Africa’s development

20-Jun-2016

Neoclassical growth theory establishes a presumption that poor countries should grow faster than rich countries. After all, they have the advantage of economic backwardness: Low capital labour ratios should raise the return to investment, ceteris paribus. Further, they can rely on global capital markets to supplement domes-tic savings, so the latter should not act as a constraint. Finally, they have access to global markets so that they can expand output in tradable goods in which they have comparative advantage.

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