Principles of Economics- Mankiw (5th) 527

Principles of Economics- Mankiw (5th) 527 - CHAPTER 24...

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CHAPTER 24 PRODUCTION AND GROWTH 545 CASE STUDY THE PRODUCTIVITY SLOWDOWN From 1959 to 1973, productivity, as measured by output per hour worked in U.S. businesses, grew at a rate of 3.2 percent per year. From 1973 to 1998, pro- ductivity grew by only 1.3 percent per year. Not surprisingly, this slowdown in productivity growth has been reflected in reduced growth in real wages and family incomes. It is also reflected in a general sense of economic anxiety. freedom, the goal of reduced population growth is accomplished less directly by increasing awareness of birth control techniques. The final way in which a country can influence population growth is to apply one of the Ten Principles of Economics: People respond to incentives. Bearing a child, like any decision, has an opportunity cost. When the opportunity cost rises, people will choose to have smaller families. In particular, women with the opportunity to receive good education and desirable employment tend to want fewer children than those with fewer opportunities outside the home. Hence, policies that foster
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