Most discussions of growth economics concentrate on a single economy which is isolated from all others. Discuss two ways in which international factors can affect growth.

Growth economics focuses on understanding the factors that contribute to a country's overall economic growth. Economic growth refers to the increase in the capacity of an economy to produce goods and services, comparing one time period to another. Factors that influence economic growth can be domestic, such as technological advancements or human capital development, or international in nature.

One way in which international factors can affect growth is through trade, particularly imports and exports. Trade enables countries to access different resources, technology, and markets, which can boost productivity and competitiveness. When a country can export goods and services, it brings in income that can further stimulate domestic growth. Conversely, when a country imports goods and services, the flow of money shifts outward, which can negatively impact domestic growth if not balanced with corresponding exports. For example, an export-oriented country like China has experienced rapid economic growth partly because of its ability to produce and export goods at a lower cost than other countries. On the other hand, when a country becomes too reliant on imports, it can result in a trade deficit, which could weaken the national currency and put pressure on domestic industries.

Another international factor that can affect growth is foreign direct investment (FDI). FDI refers to investments made by foreign individuals or businesses into a country's domestic companies or infrastructure. These investments can potentially lead to the transfer of knowledge, technology, and capital, which can elevate a country's growth potential. For instance, in the 1990s, Ireland attracted significant FDI from multinational technology companies, particularly from the United States. This influx of investment not only brought capital into the country but also introduced new technologies and management practices that contributed to Ireland's rapid economic growth, known as the "Celtic Tiger" period. In conclusion, international factors such as trade and foreign direct investment can play a crucial role in a country's economic growth. Fostering a balanced approach to trade and attracting FDI can have positive implications for the growth of a single economy.