The Catch-Up Effect Says That Countries with Low Income Can

question 61

Essay

The catch-up effect says that countries with low income can grow faster than countries with higher income. However, in statistical studies that include many diverse countries we do not observe the catch-up-effect unless we control for other variables that affect productivity. Considering the determinants of productivity, list and explain some things that would tend to prohibit or limit a poor country's ability to catch up with the rich ones.

---

Definitions:

Racial Inequality

Refers to disparities in outcomes and opportunities among individuals based on their race or ethnicity, often manifesting in economic, educational, and social settings.

American Federalism

The system of government in the United States where power is divided between a central government and individual states.

U.S. Government

The federal political system of the United States, consisting of three branches: executive, legislative, and judicial, established to govern the country.

Policy Decisions

Actions taken by government leaders or institutions that establish regulations or guidelines on various issues affecting the public.