Unit V: Growth Contribution of Railways in Latin America before 1914 Flashcards
What was the main argument of the paper regarding the contribution of railways to economic growth before 1914?
Railways had a much higher growth contribution in Argentina, Brazil, and Mexico compared to core countries where the technology was developed.
What percentage of income per capita growth did railways account for in Argentina and Mexico?
20-25%.
How did Brazil’s railway growth contribution compare to Argentina and Mexico?
Brazil’s railway growth contribution was even higher, partly due to its economic stagnation.
What role did railways play in Latin America’s economic growth during the first globalisation?
They were a major growth engine and essential for domestic market integration and connecting to the international economy.
True or False: Railways in Uruguay had a significant growth contribution similar to that of Argentina and Mexico.
False.
What factors contributed to the low growth contribution of railways in Uruguay?
Slow growth of its railway sector and the advantage of alternative water transport.
What does the term ‘social savings’ refer to in the context of railways?
The measure of the benefit of a new technology by comparing its cost to the cost of existing alternatives.
How was the growth contribution of railways estimated in the study?
By considering both the increase in railway capital stock per capita and total factor productivity (TFP) growth in the transport sector.
What is Total Factor Productivity (TFP)?
A measure of productivity that includes productivity increases within the railway sector and those from the substitution of railways for less efficient transport.
In absolute terms, how did the growth contribution of railways in Argentina, Brazil, and Mexico compare to that in Britain or Spain?
It was significantly higher.
What was the impact of geography on the growth contribution of railways in Uruguay?
Geography provided natural transport advantages, making railways less indispensable.
Fill in the blank: Railways contributed between _______ and _______ percentage points of growth per year in Argentina, Brazil, and Mexico.
0.3 and 0.7.
What was the significance of railways for export-led growth during the first globalisation?
They were crucial for integrating domestic markets and facilitating exports.
What does the research suggest about the diffusion of railway technology in different economies?
The benefits of railway technology were not uniform and could be greater in some peripheral economies than in core countries.
What is capital deepening in the context of railways?
Investment in railway infrastructure contributed to the growth of capital stock per capita.
What was the estimated social savings as a percentage of GDP in Argentina around 1910-1913?
20.6%.
How did railways affect the price elasticity of demand?
They influenced the responsiveness of demand to price changes, affecting consumer surplus.
Define supernormal profits in the context of the railway sector.
Excess profits in the railway sector that could affect the overall assessment of its economic contribution.
What major finding does the paper challenge regarding railway benefits in Latin America?
It challenges the idea that railways universally provided higher benefits in Latin America than in industrialised core countries.
What was a primary driver of economic growth in Latin America before 1914?
The expansion of exports of primary products during the first globalisation boom.
This period saw Latin America experiencing one of the fastest rates of economic growth globally.
What method did the study use to assess the direct contribution of railways to economic growth in selected Latin American countries?
Growth accounting techniques.
This involved analyzing the growth of railway capital stock per capita and the total factor productivity (TFP) gains.
What were the key findings regarding the growth contribution of railways in Uruguay?
Very low contribution compared to Argentina and Mexico, which had substantial benefits.
Railways accounted for 20-25% of income per capita growth in Argentina and Mexico.
How did the growth contribution of railways in Brazil compare to that of Argentina and Mexico?
Brazil showed an even higher contribution, partly due to its overall economic stagnation.
This suggests a more significant impact in peripheral economies than in core countries.
What does the concept of ‘social savings’ measure?
The difference between the cost of using a new technology (railways) and the cost of the next best alternative.
It highlights resource savings from the innovation.
Why was the growth contribution of railways in Uruguay significantly lower?
Due to geography offering natural transport advantages and a smaller railway network.
The country’s economic structure and the proportion of short-distance journeys also contributed.
What are the ‘capital term’ and ‘TFP term’ in measuring railway growth contributions?
The ‘capital term’ estimates the contribution from railway capital stock growth; the ‘TFP term’ estimates productivity gains from reduced transport costs.
These terms are essential for understanding the overall economic impact of railways.
How did railways facilitate the export of primary products in Latin America?
By integrating inland regions with ports for transporting bulky goods.
Examples include agricultural exports in Argentina and the coffee boom in São Paulo, Brazil.
What might be a limitation of focusing solely on TFP growth within the railway sector?
It might underestimate the overall TFP gains associated with railways in other sectors.
This overlooks significant productivity gains in sectors benefiting from cheaper transport.
How did the growth contribution of railways in Latin America compare to Britain and Spain?
Higher in absolute terms for Argentina, Brazil, and Mexico.
This indicates a greater impact on economic growth in peripheral economies.
What indirect contributions might railways have had on Latin American economies?
Facilitating new industries, fostering market integration, enabling labour mobility, promoting urbanisation.
These impacts are harder to quantify but could amplify direct growth effects.
What is growth accounting?
A method to decompose the sources of economic growth into contributions from capital, labor, and total factor productivity.
This helps in understanding the economic impact of various factors.
What is ‘Total Factor Productivity’ (TFP)?
A measure of the efficiency with which inputs are used to produce output.
It captures technological progress and efficiency improvements.
What defines ‘Peripheral Economies’?
Countries whose economic development is influenced by more developed core countries, often specializing in raw material production.
This classification is important for understanding global economic dynamics.
What are ‘Supernormal Profits’?
Profits exceeding the minimum necessary to keep resources employed in their current use.
Often associated with market power or temporary advantages.
Fill in the blank: The period of increasing international economic integration from the mid-19th century to 1914 is known as the _______.
First Globalisation.
True or False: The study concluded that railways had a negligible impact on economic growth in Latin America.
False.
Railways were pivotal in boosting economic growth in several Latin American countries.
What is ‘Capital Deepening’?
An increase in the amount of capital equipment per worker, leading to higher productivity.
This concept is crucial for understanding economic growth dynamics.
What does ‘Export-Led Growth’ refer to?
An economic growth strategy relying heavily on expanding exports.
This approach has been significant in the development of many economies.
What is a ‘Counterfactual’ in economic analysis?
A hypothetical scenario representing what would have happened in the absence of a particular event or development.
Used for comparison in economic studies.
