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The world is composed of countries that are heterogeneous in various dimensions. One dimension this chapter focuses on is size, in particular, demographic, economic, and geographic sizes. How does the size of a country affect its level and growth of income (per capita GDP)? Do small countries perform better than large countries because of their smallness, or do they perform worse? Emerging powers in the world, China and India, stand out in population size and have large territory. Is their enormous size advantageous or detrimental to income growth? Answers to this question would provide some clue to the critical issue of whether or not these countries continue to grow rapidly and become economic and political superpowers on par with the USA in the near future. The chapter explores these issues with the assistance of economic theories and statistical (econometric) analysis. |
