Chap 04 _ DeLong - -1 CHAPTER 4 The Reality of Economic...

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Unformatted text preview: -1 CHAPTER 4 The Reality of Economic Growth: History and Prospect-2 Questions What is modern economic growth? What factors have contributed to the widening of the productivity gap between Canada and the U.S.?-3 Questions Why are some nations so (relatively) rich and other nations so (relatively) poor? What policies can make economic growth faster? What are the prospects for successful and rapid economic development in tomorrows world?-4 Looking Back into Deep Time Up until 1500, there had been almost zero growth of output per worker After 1800, we see large sustained increases in worldwide standards of living population growth accelerated output per capita grew-5 Table 4.1 - Economic Growth through Deep Time-6 igure 4.1 - World Population Growth since 1000-7 Premodern Economic Growth Thomas R. Malthus first academic professor of economics introduced the idea that increases in technology inevitably run into natural resource scarcity implies that increases in technology lead to an increase in the size of the population but not to an increase in the standard of living-8 The End of the Malthusian Age Over time, the rate of technological progress rose by 1500, it was sufficiently high so that natural resource scarcity could not surpass it sustained increases in the population and the productivity of labour followed-9 The Demographic Transition As material standards of living rise far above subsistence, countries undergo a demographic transition birth rates rise death rates fall birth rates fall-10 Figure 4.2 - Stylized Picture of the Demographic Transition-11 The Demographic Transition In the world today, not all countries have gone through their demographic transitions Nigeria, Iraq, Pakistan, and the Congo are projected to have population growth rates greater than 2% per year over the next generation-12 Figure 4.3 - Expected Population Growth Rates, 1997-2015-13 Figure 4.3 - Expected Population Growth Rates, 1997-2015-14 The Industrial Revolution The industrial revolution began the era of modern economic growth new technological leaps revolutionized industries and generated major improvements in living standards Great Britain was the center of the industrial revolution English became the worlds de facto second language-15 The Industrial Revolution The new technologies were not confined to Great Britain spread rapidly to western Europe and the United States spread less rapidly to southern and eastern Europe and Japan- Industrialized Areas of the World, 1870-17 The Twentieth Century In the twentieth century the United States became the center of invention and innovation. -18 Figure 4.5 - U.S. Measured Economic Growth: Real GDP per Worker, 1900-2005-19 American Long-Run Growth, 1800-1973 Growth in the second half of the nineteenth century was faster than it had been in the first half Growth accelerated further in the early part of the twentieth century a second wave of industrialization occurred from new inventions and innovations-20...
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This note was uploaded on 02/12/2011 for the course ECON 302 taught by Professor Alvero during the Spring '09 term at The University of British Columbia.

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Chap 04 _ DeLong - -1 CHAPTER 4 The Reality of Economic...

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