Page 38 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.82, # 1, 2025, pp. 36-51

Large countries, unlike smaller states, possess the capacity to expand their economies
by leveraging both geographical and economic dimensions. For example, U.S.
President Donald Trump’s pre-election rhetoric and post-inauguration actions suggest
a strategy for driving U.S. economic expansion through the broadening of both its
geographical and economic spheres. Trump has proposed incorporating Greenland—
home to 25 of the world’s most valuable elements—into the U.S., speculated about
Canada becoming the 51st state (stating, 'Canada should join the U.S. to lower taxes'),
suggested U.S. governance of the Gaza Strip, and emphasized territorial expansion,
all underscoring his focus on economic growth potential. Additionally, Trump
pursued policies aimed at bolstering economic expansion, including raising customs
duties, pressuring Russia with economic sanctions alongside European allies, and
seeking to displace Russia in Europe’s energy market. His administration also
tightened control over the Panama Canal, reevaluated U.S. foreign aid (approximately
$50 billion)—suspending it for three months—withdrew from the World Health
Organization and halted its funding, declined participation in the UN’s Climate
Financing Program despite the U.S. accounting for 17% of global pollution, and
reduced government spending to enhance efficiency. These measures collectively
reflect a concerted effort to achieve economic growth.
One of the primary drivers of economic growth for large countries is the export of
capital. By investing capital in nations rich in natural resources and inexpensive labor,
these countries generate significant income. For instance, colonial powers like France
and the Netherlands derive substantial profits by exploiting smaller states, extracting
their resources, and utilizing low-cost labor. Meanwhile, the citizens of these
exploited countries often endure hunger and poverty, relying heavily on aid from
international organizations.

LITERATURE REVIEW
Economic expansion, distinct from the narrower notion of economic growth, is
increasingly viewed as a multifaceted process that goes beyond mere GDP increases,
encompassing long-term enhancements in production potential through innovation,
social inclusivity, environmental sustainability, and structural transformations (World
Economic Forum [WEF], 2025). This review synthesizes theoretical frameworks,
contemporary perspectives, and emerging challenges surrounding economic
expansion, drawing from classical and modern economic scholarship. Classical
theories provide a starting point, with neoclassical models like Solow’s (1956)
identifying capital accumulation, labor growth, and technological progress as key
drivers of economic potential, though often framed quantitatively. Schumpeter (1939)
shifted this perspective by introducing "creative destruction," where economic
expansion arises from disruptive innovations that reshape industries, highlighting

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