ABSTRACT
An important theme in Part C, particularly Chapters 12 and 13, has been the idea that a country’s level of construction activity is closely related to its stage of economic development. As a consequence, construction plays a leading role in the process of national development and macroeconomic management. The following two extracts review the importance of this relationship by analysing the shape of the Bon curve; a diagram that was introduced in the early 1990s by plotting GDP per capita against expenditure on construction (for the original paper see Bon 1992). The first edited extract is based on empirical evidence from 39 countries, at different stages of development, during 1994-2000. The authors adopt a clear and general approach to introduce and interrogate Bon’s theory. The second extract is slightly more advanced, in the sense that it seeks to question the exact shape of the curve for smaller nation states, such as Hong Kong, Singapore, and Trinidad and Tobago, and provides a case study approach that focuses on data relating to Cyprus during 1998-2005. Some obvious questions are suggested by studying these extracts. For example, does the data reflect the current relationship between construction output and GDP in your country? In other words, use recent construction data to clarify your understanding of the sector’s broader impacts on the current pace and direction of economic growth. What do you think of the closing idea posed in the second extract that micro-states with a fragile ecosystems will inevitably experience sharper limits on construction growth than larger scale economies? Finally, what are the implications of the dynamic role of construction for macroeconomic management? In particular, consider the importance of government policies designed to secure growth, maintain stable prices and protect the environment.
