Chapter 9_Economic Growth

Chapter 9_Economic Growth - ECONOMIC GROWTH CHAPTER 9...

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ECONOMI C GROWTH 9 CHAPTER
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Objectives After studying this chapter, you will able to Describe the long-term growth trends in the United States and other countries and regions Identify the main sources of long-term real GDP growth Explain the productivity growth slowdown in the United States during the 1970s and the speedup during the 1990s Explain the rapid economic growth rates being achieved in Asia Explain the theories of economic growth
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Transforming People’s Lives In the United States, real GDP per person doubled between 1963 and 2003. What causes the growth in production, income, and living standards? Elsewhere, notably in China and other parts of Asia, growth is even faster; technology 2,000 years old coexists with the most modern. Why is Asian growth so fast?
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Transforming People’s Lives The Lucas Wedge Again Here is a Lucas wedge in the United States. If the productivity growth slowdown of the 1970s hadn’t happened, in 2001, real GDP per hour of labor would have been $54 rather than the $40 that we actually produced.
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Transforming People’s Lives Real GDP Real GDP per household Real GDP per person (billions of dollars) (thousands of dollars per year) Actual, 2001 9,332 88.0 33.3 0.25 percent faster 10,304 97.2 36.8 0.5 percent faster 11,373 107.3 40.6 1.0 percent faster 13,848 130.6 49.5 2.0 percent faster 20,471 193.1 73.1
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Long-Term Growth Trends Growth in the U.S. Economy From 1903 to 2003, growth in real GDP per person in the United States averaged 2 percent per year. Real GDP per person fell precipitously during the Great Depression and rose rapidly during World War II. Figure 25.1 on the next slide illustrates.
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Long-Term Growth Trends
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Long-Term Growth Trends Levels of Real GDP per Capita (1995 U.S. dollars, PPP basis) Annual Growth Rate Country 1870 1913 1950 1996 1870–1996 Australia 3,123 4,523 5,931 15,076 1.3 Canada 1,347 3,560 6,113 17,453 2.1 France 1,571 2,734 4,149 14,631 1.8 Germany 1,300 2,606 3,339 15,313 2.0 Japan 618 1,114 1,563 17,346 2.7 Sweden 1,316 2,450 5,331 14,912 1.9 United Kingdom 2,610 4,024 5,651 14,440 1.4 United States 2,247 4,854 8,611 19,638 1.7
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Long-Term Growth Trends Real GDP Growth in the World Economy Some developed nations have grown more rapidly than the United States. Until the 1990s, Japan grew fastest of the rich economies. Figure 25.2(a) illustrates.
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Long-Term Growth Trends Many developing countries in Africa, Central America, and South America stagnated during the 1980s, and have grown slowly since. They have fallen farther behind the United States. Figure 4.2(b) illustrates.
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Long-Term Growth Trends Other formerly low- income nations—Hong Kong, Korea, Singapore, and Taiwan are examples—have grown very rapidly and have caught up or are catching up with the United States.
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Chapter 9_Economic Growth - ECONOMIC GROWTH CHAPTER 9...

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