Geography and Economic Growth
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If you look at the African continent, perhaps the first word to come to mind is "enormous." And that's true. You could fit most of the United States, China, India, and a lot of Europe, into Africa. But if you compare Africa to Europe, Europe has two to three times the length of coastline that Africa has. But what does coastline length have to do with anything? Well, coasts mean access to water. As benign as water might seem, it’s a major driver of economic growth. Adam Smith, the father of modern economics, argued that access to water reduced the cost of trade, and gave merchants access to larger markets. These larger markets incentivized specialization and innovation. These twin processes ultimately spurred trade activity, and consequently, economic growth. As an end result, civilization tended to grow wherever trade was easiest. If you want proof of this, think of a few major cities. Look at Istanbul, New York, Venice, Hong Kong, London, and similar areas. What do they all have in common? They all sit near a major coast or a major river. In contrast, look at some of the poorest areas in the world—places like Kampala, or Pointe-Noire. These places are all landlocked. Since goods are easier to transport over water than over land, trade in landlocked areas is more expensive. And what happens when trade is more expensive? It becomes harder to spark economic growth. What this all means is economic growth is not only affected by a country’s rules and institutions, but by a country’s natural blessings, or natural hindrances, too. The effects of geography on growth cannot be discounted. Macroeconomics Course: http://bit.ly/1R1PL5x Ask a question about the video: http://bit.ly/1QEP6wS Next video: http://bit.ly/1Q0UHtM Help us caption & translate this video! http://amara.org/v/HpAt/
Comments
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phim ma
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Africa has many long and large rivers and bodies of water to transport anything. But once again the label of poverty without a definition thereby promoting and sustaining the propaganda of Africa as a poor place. If Africa is indeed poor then why is Europe fixed on disrupting the stability of the continent by wanting to control the affairs and resources? Africa apparently has more than "poverty". Europe and America are in love with Africa's riches and love to call the continent "poor" it hides their intentions and keeps people away from discovering their evil deeds.
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I'm willing to bet that if a land locked African Country did a better job with it's rule of law and established a sales tax only tax code, the sales tax being around 15% to 20% & 10% for exports, along with Free Trade and no Tariffs they would see a major boost to their economic growth. What Corporation wouldn't want to be in a country with zero corporate taxes? and what rich person wouldn't want to retire in a zero income tax country? but that's entirely up to their rule of law, these nations tend to be in constant state of conflict with bribery being an epidemic, otherwise this economic model would give them an edge against their global competition.
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In this case, why the countries in the coast of Africa don't prosper?
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Hi, I wonder when you are going to upload new videos of Principles of Macroeconomics, they are fantastic, but there are few videos. Thanks
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What would you say is the clearest case of an exception to this rule?
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Sounds like something Jared Diamond would proclaim.
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Not sure if Africa is the best example you could have used, but you made your point clear enough
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Very good video, thanks
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