William Easterly's The Elusive Quest for Growth - Chapter 9

This chapter was all about creative destruction and it being a necessity for economic growth. Implicit in the idea of advancement is leaving old technology behind. However, occasionally new technology can exist without proper incentives to use it, so growth happens slowly. In these cases, Easterly proposes that governments might create incentives to use the newest technology.
The reason America and other countries have experienced sustainable growth is due to the fact that technology builds on itself and continues to provide increasing returns to scale.
In regards to moving toward new technology, older generations generally fight the change while youth embrace change. This conflict will continue forever. Easterly argues that war sparks economic growth because it destroys old institutions and forces the demolished countries to embrace new technology.
Technology can flow to developing countries in two ways. The first way is by foreign direct investment. The second way is through imports of new machines.
Easterly argues that path dependence causes some countries to stay poor and others to stay rich. This philosophy is based on the idea that past decisions affect current choices.
Overall, the main idea is that innovation concentrates in regions, it builds on itself, and accelerates into the future.
I generally believe that government intervention in economies is undesired, but this chapter showed me that in poor countries governments could be helpful for the economy.
It seems unfortunate but just that countries must reap what their previous actions have sown. In some instances, however, outside forces could have distressed a country and caused it to fall into a vicious poverty trap.