By Clarence Zuvekas (auth.)
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Extra resources for Economic Development: An Introduction
Indeed, some studies have cast doubt on the notion that climate significantly affects attitudes toward work and leisure. 1 Attempts to draw conclusions about the observed relationship between climate and economic development can easily ignore other possible causes of low per capita income. Furthermore, this relationship has been viewed with historical blinders. The emergence of homo sapiens, we now believe, occurred in the not-so-temperate climate of East Africa. c. were the less developed regions of their day.
Sizable markets for their products, therefore, had to be developed to ensure favorable rates of return. Social overhead capital, too, had to be provided on a larger scale. On the demand side, low and often stagnant incomes-and the relatively small number of people whose incomes are in cash-limit the demand for industrial products. For example, if a new shoe factory were established in a stagnant economy, additional demand for shoes would be limited to the small number of previously unemployed workers now receiving cash wages from the new factory.
5 percent) raises per capita income by $64, from $4,280 to $4,344. Since income levels for these two countries can be considered more or less "average" for their respective groups, one can generalize that, even with very favorable assumptions about comparative growth rates in the developed and developing nations, the absolute income gap could 11. Ibid. R. a. a. a. a. a. a. a. a. a. a. a. a. a. Source: World Bank Atlas 1977. " See notes in the source. be expected to widen for at least several decades.