ch3notes - An Overview of Economic Growth U.S. standards of...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
An Overview of Economic Growth U.S. standards of living are vastly superior to 100 years ago. Higher incomes. Many new products. Better Health. More Education. But this explosion in living standards is a new phenomenon. Standards of living vary considerably in different countries. Some poorer countries seem to catch up. Other poorer countries continue to lag behind. We seek to explain growth in incomes over time. We seek to explain differences in countries’ standards of living.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
The History of Economic Growth
Background image of page 2
The U.S. Growth Experience
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Growth Rates Definition: t t t y y y g - + 1 Alternatively, t t t t t y g y y g y y ) 1 ( 1 1 + = = - + +
Background image of page 4
A quantity growing at a constant rate, g , follows: t t t t y g y g g y g y 2 1 2 ) 1 ( ) 1 )( 1 ( ) 1 ( + = + + = + = + + In general: 0 ) 1 ( y g y t t + =
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Doubling Time Time for 0 y to grow to 0 2 y Solve for t: ( 29 ) 1 ln( ) 2 ln( ) 1 ln( ) 1 ( ln ) 2 ln( ) 1 ( 2 ) 1 ( 2 0 0 g t t g g g y g y t t t + = × + = + = + = + = For small g , g g + ) 1 ln( , and so: Rule of 70: percents) in ( 70 7 . 0 ) 2 ln( g g g t =
Background image of page 6
Logarithmic Scales ) ln( ) 2 ln( ) 2 ln( ) 4 ln( ) 4 ln( ) 8 ln( y y y y y y - = - = - ln( y ) ln(2 y ) t Log of y ln(4 y ) ln(8 y )
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Vertical Axis identified as the level of y . Spacing is the same as a logarithmic scale.
Background image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/17/2008 for the course ECON 502.02 taught by Professor Mccafferty during the Spring '08 term at Ohio State.

Page1 / 17

ch3notes - An Overview of Economic Growth U.S. standards of...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online