L3_Harrod%20Domar

L3_Harrod%20Domar - 4/6/2010 Introduction to Growth Theory...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
4/6/2010 1 Introduction to Growth Theory April 6, 2010 ARE/ECN 115A Business For Thursday PRL Ch4 pp 117 133 (Solow growth model PRL Ch4, pp 117 – 133 (Solow growth model) Easterly Ch3 (“Solow’s Surprise”) Sections this week: Bring your laptop (Excel Review) HDI, MDG’s HDI, MDG s Homework 1 Available on SmartSite Due at beginning of class Tuesday, April 20
Background image of page 1

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

View Full DocumentRight Arrow Icon
4/6/2010 2 Outline for Today Last time: Income per capita ( y ) defined as metric for “de elopment contin m “development continuum” TODAY WE ASK: What is y and how is it measured? Why is y so different across countries? Today: Harrod-Domar model Thursday - Tuesday: Solow model What is y ? Gross Domestic Product (GDP): Value of market output (finished goods and services) produced within the borders of a country in a given year. Emphasis is on geography (where is it produced?) Includes output by foreigners producing in the country (Toyotas produced in US count; Chevys produced in Mexico don’t) Excludes intermediate goods (i.e., shoes are counted but not shoelaces); Gross National Product (GNP): Value of market output produced by the residents of a country in a given year. Emphasis is on nationality (who is it produced by?) Includes output by US residents abroad, but not foreigners in the US Excludes intermediate goods. Per-Capita : Just divide GDP or GNP by population size.
Background image of page 2
4/6/2010 3 Measurement Issues Aggregation Systematic under-reporting Non-marketability Home-consumed goods Market exists for these goods but they were not sold; We can include them in GDP by valuing them at the market price; Examples? Non-market goods Goods that are not transacted AND do not have a price Examples? Social Environment Physical Environment Relative prices differ across space Problems with Price Comparisons across Space Market Structure Domestic prices affected by Degree of competition in local markets; Government intervention (taxes, subsidies, …) Differences in competition and policies differences in prices across countries.
Background image of page 3

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

View Full DocumentRight Arrow Icon
4/6/2010 4 The price of a gallon of gas across the world
Background image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/20/2010 for the course ECN 115A 115A taught by Professor Boucher during the Spring '10 term at UC Davis.

Page1 / 15

L3_Harrod%20Domar - 4/6/2010 Introduction to Growth Theory...

This preview shows document pages 1 - 5. Sign up to view the full document.

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