Download Principles of Economic Growth

Thorvaldur Gylfason
Joint Vienna Institute/
Institute for Capacity Development
Distance Learning Course on
Financial Programming and Policies
Vienna, Austria
NOVEMBER 26–DECEMBER 7, 2012
I.
Determinants of growth
1)
2)
Saving and investment
Efficiency
a)
b)
c)
d)
e)
f)
g)
Liberalization
Stabilization
Privatization
Education
Finance
Diversification
Institutions
II. Pictures of growth
III. Empirical evidence
National economic output
Economic growth
in the long run
Potential output
Actual output
Upswing
Business cycles
in the short run
Downswing
Time
To analyze changes in actual output
from year to year – in the short run
Need short-run macroeconomic theory
Keynesian or neoclassical
To analyze the path of potential output
over long periods
Need modern theory of economic growth
Neoclassical or endogenous
National economic output
West-Germany : East-Germany
Austria : Czech Republic
Finland : Estonia
Taiwan : China
South Korea : North Korea
Botswana : Nigeria
Kenya : Tanzania
Thailand : Burma
Tunisia : Morocco
Spain : Argentina
Mauritius : Madagascar
Economic system
Rapid growth
Economic policy?
Slow growth
Time
Case B: 2% a year
Output per capita
Aspects of efficiency
 Economic system
 Economic policy
Threefold
difference after
60 years
Case A: 0.4% a year
0
60
Years
Investment
Education
+
+
Growth
+
denotes a positive effect in the direction shown
Adam Smith
knew all this,
and more, as
did Arthur Lewis
Investment
+
Education
+
Growth
Robert Solow
raised doubts
about long-run
linkages
Investment
+
Education
+
Growth
+
Arthur Lewis:
X can be trade,
stable politics,
good weather
+
+
But Solow
carried the day:
long-run growth
is exogenous!
+
Suppose X is
openness to
trade; then …
Trade
+
Investment
+
Education
+
Growth
Traces the rate of growth of output per
capita to a single source:
• Technological progress
Hence, long-run growth is immune to
economic policy, good or bad
“To change the rate of growth of real output per head
you have to change the rate of technical progress.”
ROBERT M. SOLOW
Traces the rate of growth of output per
capita to three main sources:
• Saving
• Efficiency
• Depreciation
“The proximate causes of economic growth are the effort
to economize, the accumulation of knowledge, and the
accumulation of capital.”
W. ARTHUR LEWIS
You may recognize the endogenous
growth model as a reinterpretation of
the Harrod-Domar model
where growth depends on
• The saving rate
• The capital/output ratio
• The depreciation rate
Four building blocks
 S=I
Saving equals investment in equilibrium
 S = sY
Saving is proportional to income
 I = K + K
Investment involves addition to capital stock
 Y = EK
Output depends on quality and quantity of
capital
Let’s do the arithmetic:
S = sY = I = K + K
= Y/E + Y/E
Rearranging terms we find
Y/E = sY - Y/E
Multiplying by E and dividing by Y gives
Y/Y = sE - 
Bottom line

g = sE - 
Rate of economic growth equals
 Saving rate
times
 Efficiency (i.e., the output/capital ratio)
minus
 Depreciation
Three implications for growth
dg
0
ds
dg
0
dE
dg
0
d
 Our
standard of living today depends solely,
by definition, on economic growth
 Rich
countries are rich because they grew rapidly
over long periods
 Poor countries are poor because they did not
grow rapidly enough
 So
why do some countries grow more rapidly
than others?
 Why,
e.g., did Thailand leave Zambia so far
behind in one generation?
 Hard
to think of anything else (Lucas)
 Thailand
and
Zambia started out
in a similar position
and grew apart
 Thailand pursued
growth-friendly
policies, stressing
liberal trade,
stability, private
enterprise,
and education
GDP per capita 1965-2004
(US$ at 2000 prices)
2,400
THAILAND
ZAMBIA
2,000
1,600
1,200
800
400
0
65
70
75
80
85
90
95
00
Thailand 4.7% per year
Zambia -1.5% per year
1.06239 = 10.4
 Argentina
and
Sweden went hand
in hand 1900-1930,
and then grew apart
 Sweden pursued
free trade, liberal
democracy, and
income equality,
and avoided high
inflation
 Argentina did not
GDP per capita 1900-2003
(US$ at 1990 prices)
24,000
20,000
ARGENTINA
SWEDEN
16,000
12,000
8,000
4,000
0
1900
1925
1950
1975
2000
Sweden 2.1% per year
Argentina 1.0% per year
1.011103 = 3.1
 Argentina
and Spain
went hand in hand
1965-1970, and then
grew apart
 Spain pursued free
trade and price
stability through EU
membership and
adopted democracy
 Argentina lacked
stability
GDP per capita 1965-2004
(US$ at 2000 prices)
16,000
SPAIN
ARGENTINA
14,000
12,000
10,000
8,000
6,000
4,000
65
70
75
80
85
90
95
00
Spain 2.7% per year
Argentina 0.6% per year
1.02139 = 2.2
 Botswana
and
Nigeria went hand
in hand 1965-1970,
and then grew apart
 Botswana stressed
education and
resisted corruption
 Nenadi Usman,
Nigeria’s finance
minister: “Oil has
made us lazy”
GDP per capita 1965-2004
(US$ at 2000 prices)
4,000
BOTSWANA
NIGERIA
3,500
3,000
2,500
2,000
1,500
1,000
500
0
65
70
75
80
85
90
95
00
Botswana 7.1% per year
Nigeria 0.6% per year
1.06539 = 11.7
 Mauritius
did many
things right and
reaped rapid growth
 Madagascar’s
economy has
remained at a
standstill all this
time for many
reasons, as we will
see shortly
GDP per capita 1965-2004
(US$ at 1990 prices)
5,000
MAURITIUS
MADAGASCAR
4,000
3,000
2,000
1,000
0
65
70
75
80
85
90
95
00
Mauritius 4.3% per year
Madagascar -1.2% per year
1.05539 = 8.1
Country A
Country B
In %
Girls at primary
school
Country A
Country B
100
72
In %
Country A
Country B
Girls at primary
school
100
72
Investment ratio
25
11
In %
Country A
Country B
Girls at primary
school
100
72
Investment ratio
25
11
Export ratio
58
23
In %
Country A
Country B
Girls at primary
school
100
72
Investment ratio
25
11
Export ratio
58
33
23
80
Primary export
ratio
In %
Country A
Country B
Girls at primary
school
100
72
Investment ratio
25
11
Export ratio
58
33
23
80
10
18
Primary export
ratio
Inflation
In %
Country A
Country B
Girls at primary
school
100
72
Investment ratio
25
11
Export ratio
58
33
23
80
Inflation
10
18
Growth per
capita 1960-2002
4.3
-1.2
Primary export
ratio
And the countries
are:
Country A
Country B
Girls at primary
school
100
72
Investment ratio
25
11
Export ratio
58
33
23
80
Inflation
10
18
Growth per
capita 1960-2002
4.3
-1.2
Primary export
ratio
And the countries
are:
Mauritius
Madagascar
Girls at primary
school
100
72
Investment ratio
25
11
Export ratio
58
33
23
80
Inflation
10
18
Growth per
capita 1960-2002
4.3
-1.2
Primary export
ratio
 Mauritius
did many
things right and
reaped rapid growth
 Madagascar has
been at a standstill
all this time for
many reasons,
including too little
investment, trade,
and education, as
we will see shortly
GDP per capita 1965-2004
(US$ at 1990 prices)
5,000
MAURITIUS
MADAGASCAR
4,000
3,000
2,000
1,000
0
65
70
75
80
85
90
95
00
Mauritius 4.3% per year
Madagascar -1.2% per year
1.05539 = 8.1
 The

neoclassical view
that economic growth in the long run is
merely a matter of technology does
not throw much light on the impressive
growth performance of Asia since the
1960s, or on growth differentials
 The
new view
that long-run growth depends on saving
and efficiency is more illuminating
 Besides, it’s not really new, because
Adam Smith knew this (1776)

 The
neoclassical view
If two countries are identical (same
saving rate, same population growth,
same technology), then their income
per head will ultimately be the same
 This means that poor countries must
grow faster than – catch up with! – rich
countries: “conditional convergence”
 Endogenous growth theory does not
have this implication

Conditional convergence
Initial
income
Trade
–
–
+
Investment +
+
–
Natural
capital
Growth
+
Education
denotes a positive effect in the direction shown
denotes a negative effect in the direction shown
Once the main
determinants of
growth have been
taken into account,
initial income will
have a negative
effect on growth
 Conditional
convergence does not
entail absolute
convergence
 164 countries from
1960 to 2000
Growth of GNP per capita 1960-2000 (%)

8
6
4
2
0
-2
-4
-6
-8
5
6
7
8
9
10
11
GNP per capita 1965 (log)
12
Poor countries grow
faster than rich ones
if
 Growth is inversely
related to initial
income, or if
 Regression of current
income on initial
income produces a
slope coefficient that
is smaller than one

GNP per capita 2000 (log)
12
11
10
9
8
7
6
45o
5
5
6
7
8
9
10
11
GNP per capita 1965 (log)
12
 Fits real world experience quite well
 In East Asia, saving rates of 30-40% of GDP
went along with rapid economic growth
 In several African economies, saving rates of
around 10% of GDP went for a long time hand
in hand with economic stagnation
 In OECD countries, saving rates of about 20%
of GDP went along with respectable growth
 Important implication for policy
 Economic stability with low inflation and
positive real interest rates spurs saving,
which is good for growth
 An
r = rank correlation
Per capita growth adjusted for initial income (%)
increase in
investment by 8% of
GDP is associated
with an increase in
per capita growth by
one percentage point
per year
 Quantity and quality
 Cause and effect
 World Bank data for
164 countries and 40
years, 1960-2000
r = 0.42
6
4
2
0
-2
-4
-6
-8
5
10 15 20 25 30 35 40 45
Investment (% of GDP)
 Also
fits experience quite well
 Technical
progress is good for growth
because it allows us to squeeze more
output out of given inputs
 And that is exactly what increased
efficiency is all about!
 Thus, technology is best viewed as an
aspect of general economic efficiency
Important
 Everything
implication for policy
that increases efficiency, no
matter what, is also good for growth
 First
things first: Output is produced by
labor, capital, and other inputs
 Output per capita can grow through
accumulation of capital through saving and
investment, as we have seen
 Output per capita, however, cannot grow
through population growth, as we will see
 But, output per capita can grow through
improvements in labor, via investments in
human capital: Education and health care

Investment and education: Key drivers of growth
 Education
and health care make labor force
more efficient
 Technological progress enhances efficiency
 Liberalization of prices and trade increases
efficiency: good for growth
 Stabilization reduces the inefficiency
associated with inflation: good for growth
 Privatization reduces the inefficiency of
state-owned enterprises: good for growth
 The possibilities are virtually endless!
 Why
do education and health care matter?
 Because they increase labor productivity
 This is also why technological progress is
good for growth
 Technological progress enables firms to
squeeze more output from given inputs
 But so does increased efficiency!

Latin American story about air fares
 Increased
efficiency is tantamount to
technological progress, which helps growth
 If
growth were merely a matter of
technology, we could not do much about it

Except follow technology-friendly policies by
supporting R&D and such
 But
if growth depends on saving and
efficiency, there are things that we can do,
in the private sector as well as through the
public sector, to foster rapid growth
 Because everything that is good for saving
and efficiency is also good for growth
 In
sum, output per capita depends on the
quantity and quality of inputs
 Quantity of inputs can be increased through
accumulation, esp. capital accumulation
 Quality of inputs – their productivity! – can
be increased through increased efficiency





Education and health
Liberalization
Stabilization
Privatization
Aspects of institutions
 Education
and health care make the work
force more efficient
o Need to provide primary and secondary
education to all, especially females
o Need to provide tertiary education to a greatly
increased number of people
o Need increased public commitment to
education as well as health care
o Need both increased public expenditure on
education and probably also increased scope
for private sector involvement in education
and health care
lifts labor
productivity,
thereby increasing
overall economic
efficiency and
growth of output
 From unskilled to
skilled labor
 Data for 131
countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Education
r = 0.50
6
4
2
0
-2
-4
-6
0
20
40
60
80
100
Secondary school-enrolment rate (%)
of
regression line:
 An increase in
secondary-school
enrolment by 25% of
each cohort goes
along with an
increase in per
capita growth by
one percentage
point per year
Per capita growth adjusted for initial income (%)
 Interpretation
r = 0.50
6
4
2
0
-2
-4
-6
0
20
40
60
80
100
Secondary school-enrolment rate (%)
is another
way to provide more
and better
education to
children
 Produce fewer
children to increase
their average
“quality”
 163 countries,
1960-2000
Pefr capita growth adjusted for initial income (%)
 There
r = -0.54
6
4
2
0
-2
-4
-6
-8
1
2
3
4
5
6
7
Fertility (number of children)
8
public health,
reflected in
longevity, is also
conducive to
increased labor
productivity and
economic growth
 156 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Good
r = 0.54
6
4
2
0
-2
-4
-6
-8
30
40
50
60
70
Life expectancy 1960 (years)
80
spending
on health care also
spurs economic
growth
 Close connection
between public
health and health
care, i.e., between
output and input
 162 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Increased
r = 0.40
6
4
2
0
-2
-4
-6
-8
0
2
4
6
8
10
12
Health expenditure (% of GDP)
14
Liberalization of prices
o Markets, not bureaucrats, set prices
o Mixed market economy is more efficient
than central planning
o Former Soviet Union vs. the US and Europe
Liberalization of trade
o Specialization according to comparative
advantage
o Free trade is more efficient than selfsufficiency
o North Korea vs. South Korea and Singapore
of
prices increases
efficiency in
resource allocation
 Liberalization of
trade increases
efficiency in division
of labor
 163 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Liberalization
r = 0.26
6
4
2
0
-2
-4
-6
-8
0
40
80
120
160
Exports (% of GDP)
200
are not a
good indicator of
openness because
size matters
 So look at import
duties as well
 Higher duties hurt
growth, but
connection is weak
 147 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Exports
r =r-0.23
=
6
0.20
4
2
0
-2
-4
-6
-8
0
10
20
30
40
50
60
70
Share of import duties in tax revenues (%)
 Economic
theory is
clear, from Adam
Smith (1776) on:
external as well as
internal trade is
good for growth
 Good external
governance is good
for growth
 Autarky spells
disaster, always and
everywhere
Darkness in North-Korea
Stabilization of prices
Reduces distortions due to inflation
o Inflation distorts the choice between real and
financial capital by punishing money holdings,
and thus creates inefficiency in production
o Implicit inflation tax is an inefficient tax
o Inflation creates uncertainly that tends to
discourage trade and investment
o Inflation tends to result in currency
overvaluation, hurting exports and growth
increases efficiency
by reducing
production
distortions,
uncertainty,
inflation tax, and
overvaluation
 164 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Stabilization
r = -0.46
r = -0.46
6
4
2
0
-2
-4
-6
-8
0.0
0.2
0.4
0.6
Inflation distortion
0.8
1.0
inflation is a
sure sign of lax
fiscal and monetary
policies, so sound
policies support
rapid growth
 Sound financial
institutions, incl.
independent central
banks, also support
rapid growth
Per capita growth adjusted for initial income (%)
 High
r = -0.46
r = -0.46
6
4
2
0
-2
-4
-6
-8
0.0
0.2
0.4
0.6
Inflation distortion
0.8
1.0
Model 1
Inflation
distortion
-2.51
(2.07)
Natural
resources
Initial
income
Investment
Secondary
education
Population
growth
Adj. R2
0.04
Note: t-values are shown within parentheses.
Inflation
distortion
Model 1
Model 2
-2.51
-2.46
(2.37)
(2.07)
-0.09
Natural
resources
(5.75)
Initial
income
Investment
Secondary
education
Population
growth
Adj. R2
0.04
0.30
Inflation
distortion
Model 1
Model 2
Model 3
-2.51
-2.46
(2.37)
-2.26
(2.25)
-0.09
-0.10
(6.52)
(2.07)
Natural
resources
(5.75)
-0.45
Initial
income
(2.67)
Investment
Secondary
education
Population
growth
Adj. R2
0.04
0.30
Inflation
distortion
Model 1
Model 2
Model 3
Model 4
-2.51
-2.46
(2.37)
-2.26
(2.25)
-1.95
(2.25)
-0.09
-0.10
(6.52)
-0.07
(5.01)
-0.45
-0.45
(3.05)
(2.07)
Natural
resources
(5.75)
Initial
income
(2.67)
0.15
Investment
(5.41)
Secondary
education
Population
growth
Adj. R2
0.04
0.30
0.35
0.51
Inflation
distortion
Model 1
Model 2
Model 3
Model 4
Model 5
-2.51
-2.46
(2.37)
-2.26
(2.25)
-1.95
(2.25)
-1.97
(2.49)
-0.09
-0.10
(6.52)
-0.07
(5.01)
-0.04
(2.93)
-0.45
-0.45
(3.05)
-1.10
(5.39)
0.15
0.09
(3.36)
(2.07)
Natural
resources
(5.75)
Initial
income
(2.67)
Investment
(5.41)
1.24
Secondary
education
(4.24)
Population
growth
Adj. R2
0.04
0.30
0.35
0.51
0.60
Inflation
distortion
Model 1
Model 2
Model 3
Model 4
Model 5
Model 6
-2.51
(2.07)
-2.46
(2.37)
-2.26
(2.25)
-1.95
(2.25)
-1.97
(2.49)
-1.61
(2.14)
-0.09
-0.10
(6.52)
-0.07
(5.01)
-0.04
(2.93)
-0.04
(2.49)
-0.45
-0.45
(3.05)
-1.10
(5.39)
-1.27
(6.42)
0.15
0.09
(3.36)
0.10
(3.74)
1.24
1.07
(3.82)
Natural
resources
(5.75)
Initial
income
(2.67)
Investment
(5.41)
Secondary
education*
(4.24)
Population
growth
Adj. R2
-0.56
(3.42)
0.04
0.30
0.35
0.51
0.60
0.64
Note: An increase in secondary-school enrolment by a third increases growth by 1%.
Privatization
o
Profit-oriented owners and able managers
are allowed to direct enterprises
o Profit motive replaces political considerations
as the guiding principle of business operations
o Profit-maximizing owners generally appoint
managers and staff on merit rather than on
the basis of political connections
o Private enterprise is generally more
efficient than state-owned enterprises
 Privatization
Per capita growth (% per year)
replaces political
motives by profit
motive in business
 Private enterprise is
usually more
efficient than stateowned enterprises
 38 countries,
1978-92
r = -0.35
8
6
4
2
0
-2
-4
-6
.0
.1
.2
.3
.4
Share of SOEs in employment (%)
Free trade is good for growth
o Reduces the inefficiency that results from
restrictions on trade
Price stability is good for growth
o Reduces inefficiency resulting from
inflation
Privatization is good for growth
o Reduces inefficiency resulting from SOEs
Education is good for growth
o Reduces the inefficiency that results from
inadequate education, and health care


Natural resources, if not well
managed, may turn out to be, at
best, a mixed blessing
Four possible channels
o
o
o
o
Dutch disease (foreign capital)
Rent seeking (social capital)
Education (human capital)
Investment (real capital)











Dutch disease through overvaluation
Hurts level or composition of exports and FDI
Rent seeking takes many forms
Protectionism, corruption, oppression
Education falters
False sense of security
Poor quality of policies and institutions
Investment: Same story
One more thing: Resource drag
Nonrenewable natural resources are a fixed
factor of production
Decreasing returns to scale
Initial
income
Trade
Resource curse
Natural
capital
–
–
+
+
–
–
Investment +
+
–
Growth
+
Education
denotes a positive effect in the direction shown
denotes a negative effect in the direction shown
is an
important source of
technological
innovation and
progress and
thereby also of
economic growth
 156 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Manufacturing
r = 0.48
8
6
4
2
0
-2
-4
-6
0
20
40
60
80
100
Share of manufactures in exports (%)
and
mining are low-skill
labor intensive and
offer few spillover
benefits to other
industries
 Natural resources:
Mixed blessing if not
well managed
 156 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Agriculture
r =r-0.59
=
6
0.48
4
2
0
-2
-4
-6
-8
0
10
20
30
40
50
60
Primary production (% of GDP)
70
increase in
primary production
by 11% of GDP goes
along with a
decrease in per
capita growth by
one percentage
point per year
Per capita growth adjusted for initial income (%)
 An
r =r-0.59
=
6
0.48
4
2
0
-2
-4
-6
-8
0
10
20
30
40
50
60
Primary production (% of GDP)
70
aid has
sometimes been
compared to natural
resource discoveries
 Aid and growth are
inversely related
across countries
 Cause and effect
 156 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Foreign
r = -0.36
6
4
2
0
-2
-4
-6
-8
-20
0
20
40
60
Foreign aid (% of GDP)
80




Three aspects of social capital

What do the data tell us?
Equality
Honesty
Democracy
views
 Inequality sharpens
incentives and thus
helps growth
 Inequality
endangers social
cohesion and hurts
growth
 117 countries,
1960-2000
Per capita growth adjusted for intial income (%)
 Two
r = -0.27
6
4
2
0
-2
-4
-6
-8
10
20
30
40
50
60
Gini index of inequality
70
is good for
growth
 No visible sign here
that equality stands
in the way of
economic growth
 An increase in Gini
index by 16 points
goes along with a
decrease in per
capita growth by
one percentage
point per year
Per capita growth adjusted for intial income (%)
 Equality
r = -0.27
6
4
2
0
-2
-4
-6
-8
10
20
30
40
50
60
Gini index of inequality
70
views
 Political oppression
restrains special
interest groups and
thus helps growth
 Political oppression
breeds inefficiency
and hurts growth
 117 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Two
r = -0.64
6
4
2
0
-2
-4
-6
0
1
2
3
4
5
6
Political oppression
7
8
two views
 Democracy plays
into hands of special
interest groups that
hurt growth
 Democracy
facilitates change of
government and
helps growth
 143 countries,
1960-2000
Per capita growth adjusted for initial income (%)
 Again,
r =r0.50
=
6
0.48
4
2
0
-2
-4
-6
-8
-12
-8
-4
0
4
Democracy
8
12
is good
for growth
 No visible sign here
that democracy
stands in the way of
economic growth
 A rise in democracy
index by 7 points
goes along with an
increase in per capita
growth by one
percentage point per
year
Per capita growth adjusted for initial income (%)
 Democracy
r =r0.50
=
6
0.48
4
2
0
-2
-4
-6
-8
-12
-8
-4
0
4
Democracy
8
12
Per capita growth adjusted for initial income (%)
Once more, two views
 Corruption greases
wheels of production
and exchange and
thus helps growth
 Corruption breeds
inefficiency and hurts
growth
 88 countries,
1960-2000

r = 0.69
6
4
2
0
-2
-4
-6
0
2
4
6
8
10
12
Corruption perceptions index
More corruption
good business
governance is good
for growth
 Argument can be
extended to other
aspects, such as
secure property
rights and effective
bankruptcy laws
 Same story
Per capita growth adjusted for initial income (%)
 So,
r = 0.69
6
4
2
0
-2
-4
-6
0
2
4
6
8
10
12
Corruption perceptions index
More corruption
 Economic
growth responds to public
policy
 In particular, by encouraging
osaving and investment of high quality
oforeign trade and investment
oeducation and health care
oeconomic diversification
osound institutions
 ...
the government can help foster
rapid economic growth
Since the second world
war it has become quite
clear that rapid economic
growth is available to
those countries with
adequate natural
resources which make
the effort to achieve it.
W. ARTHUR LEWIS
(Accra, 1968)
 These
lessons are borne out by
experience from around the world
 Additional lessons:
Too much SOE activity hurts the quality of
investment and education — and growth
 Too much agriculture and, more generally,
natural resource dependence, if not well
managed, hurts education, investment,
and trade — and thereby also growth
 Too rapid population growth also tends to
impede economic growth

 Even
so, the question of rapid
growth is, of course, a bit more
complicated
 We also need to address a host of
political, social, and cultural
questions as well as questions of
natural conditions, climate, and
public health
But
the main point remains:
 To
grow or not to grow is in large
measure a matter of choice
 Many of the constraints on
growth are man-made, and can
be removed
These slides – and more! – can be viewed
on my website: www.hi.is/~gylfason