Lecture 10 - Econ 219 Spring 2006 Lecture #10 Economic...

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Econ 219 Spring 2006 Lecture #10
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2 Economic growth facts Similar standards of living before 1800 Sustained per capita income growth in the richest countries after 1800 Positive correlation between the rate of investment and output per worker Negative correlation between the population growth rate and output per worker Differences in per capita income are increasing No correlation between level of output per worker and average growth rate in output per worker (negative correlation for richest countries, and no correlation for the poorest)
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3 Figure 6.2 Output per Worker vs. Investment Rate
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4 Figure 6.3 Output per Worker vs. the Population Growth Rate
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5 Figure 6.4 No Convergence Among All Countries
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6 Malthusian model Advance in technology will bring higher population growth and thus would lead to no growth in per capita income Production function: L denotes land and N denotes labor There is no investment No government spending We assume that everybody is willing to work, so that N stands for labor input and population size Population growth is a function of per capita consumption: In equilibrium all that is produced is consumed:
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This note was uploaded on 12/10/2010 for the course ECON 3101 taught by Professor Staff during the Spring '08 term at Minnesota.

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Lecture 10 - Econ 219 Spring 2006 Lecture #10 Economic...

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