Deirdre McCloskey, an economist at the University of Illinois at Chicago, argued, “A poor country that adopts thoroughgoing innovation . . . can get within hailing distance of the West . . . in about two generations.”

a. What does McCloskey mean by a country adopting “thoroughgoing innovation”? What does she mean by a country getting within “hailing distance of the West”?

b. A generation is usually considered to be about 25 years. In 2018, real GDP per capita in Italy was about $34,256 (measured in 2010 U.S. dollars), and real GDP per capita in Haiti was about $729. If Haiti adopted thoroughgoing innovation and as a result its average annual growth rate over the next 50 years increased to 6.5 percent, would Haiti end up with the level of real GDP per capita that Italy enjoyed in 2018? Use the following equation: Real GDP per capita2018 * 11 + g250 = Real GDP per capita2068 where g is the average annual growth rate expressed as a decimal.

c. McCloskey also noted that her previous observation “does not mean that catch-up is inevitable.” Briefly explain why low-income countries catching up with high-income countries isn’t inevitable.