According to the text, economic outcomes measured by economic growth is affected by a numberof factors. Also, hundreds of empirical studies on economic growth across countries havehighlighted the correlation between economic growth and a variety of variables.Claims regarding the determinants of economic growth are conditional, and the findings dependon the variables used. However, the availability of physical capital or infrastructure, governmentconsumption, terms of trade, macroeconomic stability, the rule of law, regulatory quality,government effectiveness, foreign direct investments, population size, and natural resourceavailability are the most consistent findings of empirical studies on economic growth. 1. Review the literature on economic growth and provide a summary of how: a) Investment affects economic growth ( 10 to 12 sentences )b) Natural Resource abundance affects economic growthNote: ( 10 to 12 Sentences )The answers you provide to each of these sub-questions should not be more than 15sentences. Also note that because this is a literature review you must cite credible sources; avoidingusing news articles.For Example:This is the examples of literature. Example 1: The example below shows how inflation affects investment in a study of theeffect of inflation on investment. The destabilizing effect of inflation on investment has been a major source of debate in economicand business literature. Generally, inflation is often considered a sign of macroeconomic instabilityand the inability of government to control macroeconomic policy, both of which contribute to anadverse investment climate (Fischer, 2013; Greene & Villanueva, 1991). However, the empiricalevidence is still far from convincing. While some authors claim positive effects of inflation oninvestment, others hold that inflation poses a “stealth” threat to investments. For example, Greeneand Villanueva (1991) argue that high rate of inflation adversely affects private investment activityby increasing the nine riskiness of long-term investment projects. Also, Fischer (2013) observedthat inflation uncertainty is associated with substantial reduction in total investment. On thecontrary, McClain and Nicholes (1993) found that investment and inflation are positively relatedto each other. 2Example 2: The example below shows how natural resource endowments affects incomeinequality in a study of the determinants of income inequality. The nexus between natural resource endowments and income inequality has also been widelydebated and has inspired a long history of research in both economics and political science (see,for example, Fum and Hodler, 2010; Goderis and Malone, 2011; Leamer, Maul, Rodriguez, andSchott, 1999; Carmignani, 2013; Parcero and Papyrakis, 2016; Bourguignon and Morrisson,1998). For example, Anderson et al., (2004) argue that natural resources endowment provide aplausible explanation as to why the observed levels of inequality are significantly higher in bothsub-Saharan Africa and Latin America (with predominantly high ratios of natural resources toother factors) than they are in either South or East Asia (with predominantly low ratios of naturalresources relative to other factors). The intuition is that, natural resources are prone to rent-creationthat are easily captured by the ruling elite who are intransigent to redistribute towards the lowerclass, which in turn exacerbates the income gap between the ruling class and the poor majority(Nikoloski, 2009).
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