Chapter25_Append

Chapter25_Append - Chapter 25:Economic Growth Facts of...

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Chapter 25 : Economic Growth Facts of Growth:     Since 1973 growth rate of developing countries has  declined.       Before 1973 average growth rate of developing  countries was 4.4%.  At this rate it takes 16 years to  double standard of lining.   After 1973 average growth rate is 1.9%.  At this  Rate it takes 37 years to double the standard of  living. 
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Chapter 25 : Economic Growth Facts of Growth:     The slow growth has affected income level of low- skilled labor more than high-skilled labor.     Before 1500, per capita output growth was zero.  After  1500, growth of per capita output turned positive. From  1820 to 1950, average growth rate was 1.5%. Growth and Production Function We owe the theory of growth to Robert Solow and his  work on Technological Progress and Growth (1954)
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Chapter 25 : Economic Growth Aggregate Production Function  Y = F(K, N) Y:   Output        K:   Capital Input     N:   Labor Input State of technology as a major part of production  function is included in F.
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Chapter 25 : Economic Growth Returns to Factors  Marginal Product:  Increase in output per unit increase in  input   Marginal Product of Labor   Marginal Product of Capital
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Chapter 25 : Economic Growth The Law of Diminishing Return:   With a fixed amount of capital as labor input increases marginal product of labor decreases. As capital input increases marginal product of capital decreases.
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Chapter 25 : Economic Growth A Useful Transformation of Production Function : The production function Y = F(K, N) can be written in terms of Output and Capital Per Worker as: Y/N = F (K/N, 1)   This transformation helps to study growth in terms of output and income per capita.
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: Economic Growth
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Chapter25_Append - Chapter 25:Economic Growth Facts of...

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