Core Economic Principles
Applied Macroeconomics
Rodolfo M.
June 2, 2014
Universidad Iberoamericana

In today’s modern world, economies are looking for sustained and consistent growth; especially LDC’s who have stayed behind the pack due to specific event and situations. That is the case for the Dominican Republic, a “growing economy” who looks to make the most out of its labor force, natural resources and average market conditions. Since its beginnings, the DR has struggled a lot in possessing politic stability, all the way back to the beginning of the 20th century up until this day we still find the fate of many (citizens) controlled by the few (politicians). In his paper, Rodrik highlights that economic principles and policies are just a base that countries must use and understand, then build around those principles and mold them according to that economy’s needs, wants and characteristics. The DR is the perfect fit for applying Rodrik’s beliefs, it is a country with lots of natural resources (gold, minerals, fresh water, forests, landscapes) and a population willing to move forward and work hard for a good future. The US itself has been built on pure capitalism, letting markets rule themselves, low taxes incentivizing businesses and organizations, and education; so why doesn’t the DR adopt US’s policies and principles in order to create growth? Very simple, it lacks the final component, education. Education is one of the most important pillars of a well-built economy, it educates the labor force creating trained, creative and obedient workers who want the best for themselves and unconsciously do the same for the economy. Dominican Republic was forced in the beginning of the decade to adopt high tax rates to try and save an indebted country (sacked by corrupt and uneducated politicians), however this approach slows down the economy and