econ3 8-2 - 2-8-08Chapter 8 continued-Economic Growth...

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Unformatted text preview: 2-8-08Chapter 8 continued-Economic Growth TheoriesoPopulation growthoLabor productivityoTechnological changeoReal GDPoReal wageoCapital stockoReal interest rateoRising aggregate houroPopulation increased-First model of economic growthoIncrease population Increase labor supply•Decrease real wage•Increase aggregate hour worked (b/c more people)oIncrease potential GDPoExogenous variable: one that try no to explain (very first step)oEndogenous variable : trying to explain what happen to output-Second econo mic growth m o d eloIncre as e labor productivity (it can b e ch ang e in tech or hu m a n capital) (this directeffect on production function) (incre as e production function)Increas e labor d e m a nd•Incre as e real wag eIncrease aggregate hour•Increase potential GDP (move along P.F) (Potential GDP increases)-Classical Growth TheoryoThe view that the growth of real GDP per person is temporary (might increase but comes down)-Subsistence real wage...
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This note was uploaded on 12/02/2009 for the course ECON econ taught by Professor For got during the Spring '09 term at UCSD.

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econ3 8-2 - 2-8-08Chapter 8 continued-Economic Growth...

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