Mon Dec 14 2009

Arnold Kling of EconLog and author (with Nick Schulz) of From Poverty to Prosperity talks about the book with host Russ Roberts. He discusses how modern economists think about growth in both developed and undeveloped countries and contrasts those ideas with earlier economics views. The focus of the modern understanding is on ideas and the ability of ideas to improve technology, leading to prosperity. Unlike physical capital, ideas can be enjoyed by many people at once, explaining why past models that ignored ideas and focused on physical capital failed to account for the observed magnitude of economic development. Kling also discusses the success of China and India.