ABSTRACT
In the previous chapter we introduced one of the central problems in the economies of Latin America. This problem concerns the rate of growth of GDP in the region. For much of the post-war era, economic growth in the region has been positive. However, the growth of the economies of Latin America has been slow relative to some other regions of the world at a similar stage of economic development. In this chapter we will begin to address this question in a more systematic way. In order to do this we must first learn a bit about how economists explain economic growth. The study of economic growth is both old and new. It is old in the sense that modern economics traces its roots to the publication in 1776 of Adam Smith’s The Wealth of Nations. However, the full title of the book is instructive: An Enquiry into the Nature and Causes of the Wealth of Nations. In a broad sense, Smith was concerned with economic growth or what now is referred to as economic development.
