Economic growth involves increases over time in the volume of a country’s per capita gross national product (GNP) of goods and services. Such continuing increases can raise average living standards substantially and provide a stronger base for other policy objectives such as national defense, various kinds of capital investments, or public welfare services. It is only in the last two centuries that continued growth in living standards has been realized for a number of now-developed countries, and this process has broadened in the 20th century to include a number of developing countries. However, the fairly steady expansion in the third quarter of the 20th century gave way to a period of slower and more erratic growth for both high- and low-income countries, while some of the economically poorest countries were thus far unable to establish a self-sustaining pattern of development. It also became increasingly evident that there were serious environmental problems associated with some types of growth in production.
This article examines the record of economic growth and development, some explanations for the changes involved, and the attempts by governments to plan these changes. Two major issues are involved. The first is why economic growth occurs more quickly in some countries and periods than in others. It is the increase in the size and quality of the factors of production that underlies growth, but certain forces—innovations and entrepreneurship, the part played by governments, and the role of investment as distinct from consumption—deserve special attention. A variety of models of economic growth give expression to the understanding of these forces. Increasing attention has been paid in these models and in policy to the international aspects of growth. This trend is partly a reflection of the growing internationalization of economic activity. It also reflects a number of potentially destabilizing changes in the international economy that became evident during the 1970s. While the precise nature of their effects is open to debate, among these changes should be noted the transition to more flexible exchange rates, the supply shocks in petroleum and other products, the growth of international debt, and the development of several major centers of economic power.
The second issue is the challenges facing the low-income countries, namely, to move from subsistence levels of per capita income to a level that would generate self-sustaining growth and also to reduce the gap between themselves and the high-income countries. Differences among the lower income countries warn against making sweeping generalizations on the development process, but three topics have attracted much attention. One is how far existing private and public organizations must be changed so as to institutionalize development. A second is the view that, particularly for manufactures and for smaller markets, reliance on import substitution should give way fairly quickly to export development. The third is the impact of population growth on both development and living standards.
62. According to this passage, the economic expansion in many developed and developing countries did not become slower until ______.
63. The underlined word “erratic” in the first paragraph most probably means ______.
64. The second paragraph of this passage is mainly about ______.
65. According to the author of this article, ______.
