Economics 2150A/B Study Guide - Quiz Guide: Rent-Seeking, Dutch Disease, Core Countries

• School: Western University
• Department: Economics
• Course: Economics 2150A/B
• Professor: Colin Denniston

Document Summary

Since 1960s, resource poor countries have outperformed the resource rich countries (auty, 2001): colonies with greater natural resources do worse in data empirically supported by real gdp per capita negatively related to exports of natural resources/gdp. High wage in resource sector draws in all talent and focus. Resource abundance leads to high rent seeking, low innovation, low entrepreneurial activity, poorer gov. Export sectors become uncompetitive: primary goods had low income elasticity, export earning instability, worsening in terms of trade for primary goods. Introduced semi-periphery to dependency theory: world system replaces nation states as unit of analysis, applied marxist capitalism to macro cycles, core countries do not exploit periphery as in other dependency theories (exploit labour in all zones) Capitalist(empire) cycles: empires continuously overtaking (france, britain, usa) Vent for surplus how stable exporters grow. Pattern of settlement will follow extraction of staple resources. Colonies survive and grow due to surplus labour. New resource discoveries creates imbalances in wages between regions.