growth - Part II Growth and Development UCLA Winter 2008...

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Part II Growth and Development UCLA Winter 2008 Professor Mark Wright
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US Living Standards 0 10,000 20,000 30,000 40,000 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 Great Depression World War II First oil price shock Second oil price shock long-run upward trend… 9/11/2001
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Taiwan vs Argentina 0 5000 10000 15000 20000 25000 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 7,250 975 21,000 11,0 0 0 Taiw an Argentina
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GDP per Person 000 0 1111 1 2 2 33 4 5 5 9 10 11 14 15 17 22 26 30 31 39 42 50 53 56 60 65 67 67 67 70 70 70 73 73 79 99 100 106 107 134 0 20 40 60 80 100 120 140 160 Congo, Dem. Rep. Burundi Ethiopia Chad Cambodia Zambia Bangladesh Sudan India Zimbabwe Angola Congo, Rep. China Egypt, Arab Rep. Iran, Islamic Rep. Russian Turkey Botswana Brazil Chile World Mexico Argentina Saudi Arabia Greece Korea, Rep. New Zealand Spain Kuwait Israel Italy Australia France Singapore Germany Canada United Kingdom Austria Netherlands Ireland Hong Kong, China Sweden Switzerland United States Japan Norway Luxembourg Relative to USA 2000 US dollars
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GDP per Person 2 222 5 2 44 7 7 4 3 11 10 17 20 19 24 21 26 22 27 35 39 49 47 59 64 57 67 75 79 79 68 75 79 77 82 87 84 76 77 91 100 74 99 146 0 20 40 60 80 100 120 140 160 Congo, Dem. Rep. Burundi Ethiopia Chad Cambodia Zambia Bangladesh Sudan India Zimbabwe Angola Congo, Rep. China Egypt, Arab Rep. Iran, Islamic Rep. Russian Turkey Botswana Brazil Chile World Mexico Argentina Saudi Arabia Greece Korea, Rep. New Zealand Spain Kuwait Israel Italy Australia France Singapore Germany Canada United Kingdom Austria Netherlands Ireland Hong Kong, China Sweden Switzerland United States Japan Norway Luxembourg Relative to USA 2000 US dollars at International Prices
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Why growth matters 1,081.4% 243.7% 85.4% 624.5% 169.2% 64.0% …100 years …50 years …25 years percentage increase in standard of living after… annual growth rate of income per capita 2.5% 2.0% • Anything that effects the long-run rate of economic growth – even by a tiny amount – will have huge effects on living standards in the long run.
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0 10 20 30 40 50 60 70 80 90 100 $0 $5,000 $10,000 $15,000 $20,000 Income per capita in dollars % of population living on $2 per day or les s Madagascar India Bangladesh Nepal Botswana Mexico Chile S. Korea Brazil Russian Federation Thailand Peru China Kenya Income and poverty in the world selected countries, 2000
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I do not see how one can look at figures like these without seeing them as representing possibilities. Is there some action a government could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s? If so, what exactly? If not, what is it about the nature of India that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else. - Robert E. Lucas, Jr. (1988) p.5
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Plan for Part II of Course z Mathematical Preliminaries Continuous time: derivatives Tricks with growth rates Logarithms z Growth Facts z Growth Accounting Case study: the US productivity slowdown of the 1970’s Case Study: an East Asian growth Miracle?
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growth - Part II Growth and Development UCLA Winter 2008...

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