Arthur M. Diamond, Jr.: Openness to creative destruction: sustaining innovative dynamism

Originally published in Public Choice

Why are some countries rich and others poor? This question has driven economic science since its founding. The answers provided have ranged from deeply philosophical to rigorously technical. But at some point, they all turn on the development of new and better products, or new and better ways to make products, or new and better ways to deliver products. In short, gains from trade must be pursued, and gains from innovation must be captured for economic wealth to be produced. The countries that fail to realize the gains from trade and innovation linger behind, and their people suffer the fate of poverty.

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