Growth

The growth of an economy may be considered to be the single most important concept in order to determine its success or failure. Growth is defined as an increase in the amount of goods and services an economy produces. After having read Ch. 24 of Colander, it is clear that several concepts contribute to the amount of growth within an economy. Specialization, for example, increases productivity, thus increasing growth. Therefore, this is why I have decided to specialize each city in something (as I've mentioned in previous posts). According to Colander, there are five sources of growth: Capital accumulation, available resources, growth-compatible institutions, technological development, and entrepreneurship.

In Civ IV, not all of these sources are clearly present. However, the availability of resources and technological development are undoubtedly a key factor in the success of your civilization. For example, if your civilization is located in an extremely beneficial area (such as the Fertile Crescent), several resources are available. As the game progresses, explorers and workers will continue to find more and more resources as well. For example, a worker can construct a mine, a plantation, a camp, or several other "institutions" that create resources such as oil, fur, food, etc. Also, the presence of water along your borders is an important resource (this is why one's location is key).

On page 570 in Colander, figure 24-2 portrays the importance of souces of GDP Growth. It is evident that labor and technology are the two sources which contribute most significantly towards growth. Therefore, it is imperative that your workers (the labor aspect) are constantly in action, finding resources and constructing several institutions that will ultimately contribute to the growth of your civilization. Also, it is important that a very large amount of time be dedicated towards technological advancement in the game, for according to figure 24-2, it is the single-most important source of growth.

According to the new growth theory, the role of technology is the primary source of growth. This is not a theory which can be argued. In Civ IV, the technological advancements are clearly the most important, for they all lead to extremely necessary sources upon which one's economy is based. The small description on page 575 of Colander demonstrates the important of technology: Technology --> Investment --> Further technological advancement --> Growth. This is the reason why dedicating as much time as possible towards the aspect of technological advancement in Civ IV is the most important (at least in my mind). Also on page 575, Colander shows the effect of technological growth on the production function (an abstraction that shows the relationship between the quantity of inputs used in production and the quantity of output resulting from the production) and the PPC. The technological growth clearly increases the output of both the PPC and the production function, thus resulting in the growth of the economy as a whole.

A final comment I would like to add is that both of these sources of growth can be obtained by means of trade. As I've mentioned before, trade is one of the most important concepts of the game, for it allows you to possibly receive more resources and new technology. Therefore, it is evident that trade can be the beginning of a long chain of steps that leads to growth, for it can lead to availability of resources which can lead to more land which can lead to more power, and so on. Trade can also lead to technological advancement which ultimately leads to growth as well. I can only speak of trade and its significant impact so much, but I have realized that it is truly one of the most important aspects of Civ IV.

While there are several other sources of growth, I simply believe that these two (technological advancement and available resources) are the only ones which clearly play a role in Civ IV. By contributing a significant amount of time to these two concepts, one's civilization will be able to grow at a rapid pace, thus ameliorating the living standards of your people, and increasing output. From here, it is simply a long chain of beneficial results, ultimately resulting in the growth of your economy as a whole.