Midterm 1.docx

# Midterm 1.docx - Midterm 1 Macro 2 Population Growth and...

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Midterm 1 – Macro 2. Population Growth and Demographic Transition (PRLB, Ch. 7) - Y = F ( K , L ) - If MPL>APL -> A rise of GDP per capita - If MPL<APL -> A fall of GDP per capita - IRS Technology -> A rise in L has a net effect on GDP - CRS Technology -> A rise in L will never increase Y/L and likely lead to a fall in GDP - Rapid population growth is not the best for GDP_PC Growth o LDC: High population growth o DC: Low population growth - Crude Birth Rate (CBR): Number of live births per 1000 population o Depends on age distribution of a country Younger populations lead to higher CBR - Crude Death Rate (CDR): Number of deaths per 1000 population - Crude Rate of Natural Increase (CRNI): population growth rate CBR – CDR - Total Fertility Rate (TFR): A synthetic measurement of number children born to the typical average women in a country who lives at least to the age of 49 o Length of Age Interval 1000 ASBR o Average specific birth rate (ASBR): Number of children born per women in age cohort 0-20 10 A=1 20-40 30 A=2 40-60 5 A=3 Ex: 20 × 45 1000 = 0.9 o Note: The TFR does not depend on a common age distribution TFR is better suited for international composition of fertilely behavior than the CBR Use CBR for population growth calculation - Survival rate (SR): % of women who live to the end of child bearing years (49) 0<SR<1 - Replacement Level Fertility (RLF): R/SR or # of level fertility needed to keep population size constant Ex: SR =1 and RLF = 2 then SR = 0.5 RLF = 4 - In a DC – RLF =2.1 - Population Growth = CRNI + Net I - Net I: the net immigrants that [ immigrants rate – emigrant rate ] - Note: TFR < RLF Population growth is negative in the LR o In 2014 population growth in HIC was positive (0.3) Reasons – 1. Positive Net Immigration 2. Population Momentum - Population momentum: rapid growth before most fertile which echoes into the future, is curse if the age distribution is skewed toward the young - TFR above replacement levels because 1. Desire for large families 2. Failure to achieve desired number of children 3. Population momentum How important is population for population growth?

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LDC High CBR High CDR DC Low LBR Low LBR - Demographic Transition: Economic development includes the change from high CBR and CDR to low CBR and CDR A. Traditional Stage B. Transition Stage C. Modern Stage High CBR – old age support, child labor, high infant mortality rate High CDR – poor medical knowledge/disease, war, famine PHASE 1 Rising CBR – rising incomes lead to higher demand for children, higher fecundity (healthy women more likely to get pregnant Falling CDR – better medical knowledge, higher agriculture production, food supply, cleaner water supply and sewage treatment PHASE 2 Declining CBR – fewer children to raise quality, more secular Falling CDR – Same as phase 1 Falling CBR – Social Security, child labor laws Falling CDR – same as transition stage Economic models that link population growth and economic development Mathus Model (1766-1834) – population will expand for as much as population can as food supplies permits - Simple Model A. Output grows at a linear rate o X = 2 t B.
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