David N. Weil. Economic Growth.
Fatima, Nishat
David N. Weil. Economic Growth. (Second Edition). New York: Addison
Wesley Press, 2009. 565 pages. Paperback. Price not given.
Despite the great concern towards the issue of the convergence of
economies, the world is still witnessing the gap between rich and poor
being widened progressively. The book examines the interesting question
of why some countries are rich and some are poor-why they differ in
their levels of income and their rates of economic growth. Featuring the
latest data, new case studies, and a number of significant additions in
the content, the new Second Edition takes the Weil legacy further. The
text develops a very balanced relevance of both macroeconomics'
classical roots and its current practice in the field of growth.
Engagingly written, it brings into use simple models, close to reality
examples, and instructive tables and figures to address the key issues.
Chapter summaries, list of key concepts at the beginning of each
chapter, questions for review, as well as problems and applications to
help the diligent reader master the material he provides. The clarity of
the writing, the richness of the empirical and quantitative
descriptions, and the best available evidence of some of the modern
economies confronting growth issues, however, would further deepen his
interest.
Even with my long time aversion towards mathematical rich
explanations, I personally have found this book highly interesting and
well worth reading, mainly because the profound knowledge has been
imparted in a way that even the most complex issues are explained in a
simply, though mathematically as well. Together with a distinctive
theoretical focus on problem solving, the book brilliantly matches
accessibility with cutting-edge theory. There are discussions of
functions within each chapter, but much of the math is put into
footnotes, separately in mathematical extension boxes, and in chapter
appendices. Each chapter ends up in a conclusion that gives the chapter
a sharp point. And the order in which author takes forward a concept
from its base to its application in today's world scenario, and
even in the future, keeps the reader's attention intact.
The text book is structured in five parts, each containing a set of
series of chapters. The first part overviews some historical facts over
the growth trends, as old as 1820, and logic of the divergence in income
growth rates between countries. The second part includes some hardcore
macroeconomic concepts about population and economic growth theories.
The author has introduced some innovative concepts in this context. For
instance, how much of the variation in income across countries does
education explain, is one I enjoyed reading most. He holds the lately
discovered element of technological progress in the production function,
accountable as one of the vital factors for enhancing the efficiency of
the economy in the subsequent part (three). The improved mathematical
version of the technology production function and its incorporation in
the famous Solow Model is remarkable, yet simplistic. The succeeding
chapter defines a proper role of the central government in containing
economic problems, thus negating the primitive notion of making its role
as small and as unobtrusive as possible for economic affair's
management. He unfolds the long ago mystery of as to whether its the
poverty (both of income and mind) which makes a government bad, or
mirror image is the case, by showing their two way causal relationship,
through facts and figures. Here the author steadily progresses a step
farther without segmenting the reader's concentration, towards
recounting a few of the very basic concepts of income inequality,
coupled with substantive empirical evidences. He identifies it as one of
the factors deterring growth. Moreover, he studies the general
masses' behaviour of savings, inclination toward child education,
under the influence of domestic culture. Since culture is a qualitative
term, its impact on macroeconomic variables can't be quantified.
However, David Weil tentatively concludes in the presence of significant
data that culture to some extent does help in explaining differences in
per capita income between countries, thus indirectly shaping up the
growth trends. Geography, climate, and natural resources are believed to
be few other important factors, stimulating the growth process of any
economy, through trade, agricultural productivity, and improved living
standards. Environmental sustainability is emphasised greatly. The
author asserts the need of conservation of the natural resources, as
their depletion has already contributed a great deal in retarding
growth. He has provided ample evidence to confirm perpetuating growth,
if the process of substitution of resource-saving-technologies comes
into play.
The essence of growth is and ought to be to make people in general
content and happier. This notion, though has not been supported much
evidently, however, still remains true for the majority. And this is
precisely what the author ascertains in the last chapter, together with
answering certain dilemmas, which have always been something of an
enigma to an economics student. These are the key, carving-the-destiny
issues which economies will be facing in the near future. I appreciate
the way the author argues and counter argues on the independent
practicability of three macroeconomic variables, namely, factor
accumulation, technology, and efficiency, which are considered
inevitable for growth. Rather, he is suggestive of mix of their usage.
However, these alone are not indicative of the poverty or richness of
economy. Government behaviour is one particular strong influential
determinant. The author establishes the fact that governments of poor
economies are damaging for growth, in that they are more corrupt and
more wasteful in their expenditures. The book eventually finishes on a
positive note that "growth will certainly cause reduction in the
income disparities, and converge economies at the steady state of
growth, sooner or later.
In a word, I would not feel reluctant to acknowledge the competence
and ingenuity of the author, who has masterfully integrated the current
growth concerns in a single volume. Being a macroeconomics lover, I
simply adored this book and can't help myself figuring out a single
reason for not buying and making it an addition in my home library.
Nishat Fatima
Pakistan Institute of Development Economics, Islamabad.
