Markets and Growth

Markets are the mechanisms through which economic resources are channelled and where economic incentives are set. Hence, their functioning is critical to both static and dynamic efficiency as well as to the responsiveness of the economy to shocks. While both product and factor markets are important in allocating resources, factor markets also influence the rate of resource-creation. 2 This chapter affirms that markets are crucial to growth and combines suggestions of Topel (1999) and Pritchett (2000) to argue that country-specific markets should be a principal focus of future research on growth. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.