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Unit 4 Macro: Constraints on Growth and Development

Monday, September 17, 2012
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This blog will link to a series of posts on some of the possible constraints or limitations on the sustained growth and development of a country. Keep in mind a high level of diversity between countries and regions, some of these constraints have a bigger effect on potential growth and development in some countries than others. Successful and effective policies are those that target and address the constraints. Some of these factors apply mainly to developed countries and some are focused on the growth potential of lower-income emerging economies many of whom have enjoyed rapid growth in recent years. Remember that economic growth is a long-term concept referring in the main to a nation’s productive potential and competitiveness:

Infrastructure weaknesses

Primary Export Dependency

Ageing and/or declining population

Conflict and Corruption

Human Capital Weaknesses

Savings Gap and Foreign Exchange Gap

Problems in making best use of natural capital resources

Inequalities of income and wealth

Poor Policy Making




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