KW_Macro_Ch_06_Sec_03_Long-Run_Economic_Growth - chapter 6...

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>> Macroeconomics: The Big Picture Section 3: Long-Run Economic Growth chapter 6 Although 2002 was a difficult year for all new graduates seeking jobs, the jobs actu- ally on offer paid extremely well by historical standards. The pay package of an aver- age U.S. worker in 2002, even after correcting for higher prices of goods and services, was worth almost three times as much as the pay of an average worker in 1948. In fact, the purchasing power of the average American worker’s wage, the aver- age family’s income, and just about any other measure of what ordinary people can afford, has been rising steadily since at least the middle of the nineteenth centu- ry. The reason is that aggregate output, despite occasional declines, has trended powerfully upward over the long run—and has grown at a much faster rate than the population. Recall from panel (a) of Figure 6-2 in “Section 2: The Business Cycle” that the average growth rate of aggregate output from 1948 to 2004 was 3.5%. Over that same period, the U.S. population grew at an average rate of only 1.3% each year. So the size
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This note was uploaded on 04/10/2008 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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KW_Macro_Ch_06_Sec_03_Long-Run_Economic_Growth - chapter 6...

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