Does Third World Growth Hurt First World Prosperity?

927 WordsFeb 15, 20164 Pages
In the article by Krugman “Does Third World Growth Hurt First World Prosperity?” we are given an account that goes contrary to popular belief. The article argues that economic development, which is taking place in Third World countries, is not a threat to the First World. Specifically, the article uses four models with examples to convey his argument against the popular belief of third world economic growth posing a threat and concludes with addressing what the real threat is. Let us now take a closer look at the article. We will begin by analyzing what the popular belief is and will proceed to exploring the concept of world economy. To be more precise, we will explore and elaborate the four models discussed by Krugman. The prevailing opinion, as written by influential business writers is that competition from developed countries is a major threat to U.S. prosperity. Yet, while the U.S. looks healthy and economic adversaries (e.g. Japan and Europe) look less invincible, a search for a new started. The belief is that economic growth in developing countries is a threat for the West. Rather than welcoming the change, since the standard of living of millions of people is being improved, these emerging economies are perceived to be threats. This, as we will soon see, is unwarranted. If we think about the world economy, we can see that as world productivity rises so does the average living standards. In other words, the higher Third World productivity will, in turn, be

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