Economic Growth between 3 Countries

Essay by pminesCollege, UndergraduateB+, September 2014

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Pat Mines

ECON 351


Professor Fairchild

Economic Growth Between Countries

While the world has seen economic growth in almost every country in the past 200 years, the rate at which these countries grow are far from constant. The United Kingdom, China and Ethiopia have all grown at different paces since the 1800's due to government policies, world revolutions and changes, and other economic differences. The diversity of challenges that each of the countries faced are what allowed some to be successful and others to fall behind.

The United Kingdom has been blessed in many ways compared to the rest of the world. Their initial success started with the wealth of the country and consequently their life span compared to other countries. Their geographic location also blessed them to achieve their wealth and status. With easy access to ports and harbors, trade rapidly increased and granted the United Kingdom a head start in the race to be the most powerful country in the world.

During the early 1800's though, most of the countries in the world had similar economies until the Industrial revolution. This change in the world revolutionized the economic development. While the increased urbanization pushed the aggregate supply of workers to the right, the increased demand for goods, services and jobs pushed aggregate demand to the right as well, resulting in no growth of inflation until the 1840's, but an increased growth of short run GDP. The new steady state of the the economy would boost the wealth, and consequently the lifespan of people.

This growth would continue until the 1910's during the first world war where the UK would see its GDP suffer. During WW1, it took on 136% of it's GDP as credit from the USA. Instead of returning back to its normal steady state after...