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Unformatted text preview: 1 1 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 Chapter 3: An Overview of Long-Run Economic Growth Part 1 + 2 Ruxandra Prodan 2 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth The United States of a century ago could be mistaken for Kenya or Bangladesh today. Some countries have seen rapid economic growth and improvements to health quality, but many others have not. 3 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth 3.2 Growth over the Very Long Run Sustained increases in standards of living are a recent phenomenon. Modern economic growth only emerged in the most recent two or three centuries. Sustained economic growth emerges in different places at different times. Per capita GDP ___________________________________________ 2 4 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth The Great Divergence is the era of increased difference in standards of living across countries. Before 1700, nations differed only by a factor of two or three, while today it is over a factor of 50 for several countries. 5 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth Figure 3.1: Economic Growth over the Very Long Run in Six Countries 6 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth 3.3 Modern Economic Growth From 1870 to 2000, United States per capita GDP rose by nearly 15-fold. A typical college student today will earn a lifetime income ____________________________________ When were you born? __________________________ __________________________ 3 7 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth The Definition of Economic Growth Growth of per capita GDP is the exact rate of change of per capital GDP. Precisely, a growth rate is the________________________________________ __________________________________________ . A percentage change is the ___________________________________________ ___________________________________________ 8 2008 by W. W. Norton & Company. Al rights reserved CHAPTER 3 An Overview of Long-Run Econom ic Growth the growth rate between period t and t + 1 is: The level of per capita income next year is equal to per capita...
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This note was uploaded on 10/02/2010 for the course ACCT 5457 taught by Professor Polm during the Fall '10 term at Rensselaer Polytechnic Institute.

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6 - 1 1 2008 by W. W. Norton & Company. Al rights...

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