Economic Development

November 24, 2015

These videos were released Nov. 24, 2015.

Part 1: Why Are Some Countries So Rich and Others So Poor?

The gap between rich and poor countries has grown exponentially since the days of Adam Smith. In the 1770s, rich countries were twice as well-off as poor countries. These days, GDP per capita is 35 times higher in rich countries than in poor. In this video, economist B. Ravikumar explains how he and other economists are looking at these cross-country income differences.

Part 2: Reducing Trade Barriers to Close the Gap between Rich and Poor Countries

If barriers to trade are removed, capital goods flow more freely across countries; this benefits all parties because they all can use their resources more efficiently. The removal of trade barriers could close the income gap between rich and poor countries by 50 percent, according to research conducted by economist B. Ravikumar and his colleagues.

Read the working paper, "Capital Goods Trade, Relative Prices, and Economic Development."

Economists and experts talk about their research, topics in the news and issues related to the Fed. Views expressed are not necessarily those of the St. Louis Fed or the Federal Reserve System.

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