Sow's ear effect

In economics, the sow's ear effect is the inability of a country to raise its productivity or per capita gross domestic product relative to other countries of similar development despite adjustments in macroeconomic policy, such as the exchange rate or the interest rate. This is due to deficiencies on the supply side of the economy, which in turn could be for reasons such as a poorly skilled labour force.

The term sow’s ear comes from the phrase: You can’t make a silk purse out of a sow's ear.

See also

  • List of economics topics


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