{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 7 Productivity and Gains Oct 6 lecture

Chapter 7 Productivity and Gains Oct 6 lecture -...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
7-1 Chapter 7:  1Economic Growth o Imagine a world with no fax machines, no cellular phones, no satellite TV and no  digital sound o Such a world actually existed – and only 30 years ago! o At that time, personal computers were still on the drawing board o Laptops weren’t even envisioned o Websites were not created o No one popped microwave popcorn o New products are evidence of economic progress over time o We produce not only more goods but also new and better goods and services o In the process we get richer and our material living standards rise o However, different economies grow at different rates o In China, India, South Asia and Pacific regions economic growth has lifted  millions of people out of poverty o But the World Bank estimates that in some other countries there are poorer  groups where $1.1 billion people live on $1 a day or less and 2.7 billion people live in $2  a day or less o This chapter will study economic growth and the differences in growth rates  around the world
Image of page 1

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

View Full Document Right Arrow Icon
7-2 Economic Growth o The term economic growth usually refers to the growth of one of three  interrelated macroeconomic variables o Aggregate output/income (gdp) o GDP per capital o Productivity:  GDP produced from each hour (or year) or a worker’s time o Economists are most concerned about the growth rate of GDP per capita (a  measure of a country’s average income level) and the growth rate of productivity o Measured in constant 1992 dollars, Canadian GDP per capita increased from  $9,400 in 1950 to $30, 250 in 2000; after correcting for the effects of inflation, average  real income per capita more than tripled over the last half century See:   www.csls.ca o On-line Availability of the Spring 2008 Issue of the  International Productivity Monitor
Image of page 2
7-3 The Rule of 70 70 g o According to the rule of 70, if the same variable grows at a rate of g percent per  year, then the variable doubles in approximately 70/g years o “g” is the annual growth rate o In a country such as Canada, average income as measured by real GDP per  person has grown at about  2 percent per year o Example:  if a country grows at 5 percent per year according to the rule of 70 is 
Image of page 3

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

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern