economic-growth

economic-growth - Economic Growth Sandeep Bhaskar Temple...

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Economic Growth Sandeep Bhaskar Temple University Sandeep Bhaskar (Temple University) Economic Growth 1 / 27
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Outline 1 Introduction 2 Explaining Economic Growth 3 Theories of Economic Growth Sandeep Bhaskar (Temple University) Economic Growth 2 / 27
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Introduction Economic Growth Economic growth is the study of rate of change of gross domestic product. It can be positive, meaning GDP is growing, or negative, meaning GDP is falling. The term we are most interested in is change in per capita GDP. It is relevant because it provides an answer to how much wealth an average citizen has at his or her disposal. Sandeep Bhaskar (Temple University) Economic Growth 3 / 27
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Introduction Country-wide Variations in Growth Countries across the world have experienced varied levels and rates of growth. This has meant that there are wide discrepancies in the wealth levels of people across different countries. The richest countries are in North America and Europe. The poorest are in Africa and Asia. Sandeep Bhaskar (Temple University) Economic Growth 4 / 27
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Introduction Sample Per Capita GDP Richest Countries Poorest Countries Country ($) Rank Country ($) Rank Luxembourg 113044 1 Burundi 138 180 Norway 94387 2 Congo 175 179 United States 47440 13 Afghanistan 416 170 United Kingdom 43734 20 China 3249 104 Table: Per Capita GDP, Nominal Terms, 2008. Source: IMF. Sandeep Bhaskar (Temple University) Economic Growth 5 / 27
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Introduction Income Variation As you can see from the table in the last slide there are wide variations in income between countries. The richest country, Luxembourg, has per capita GDP that is more than 800 times larger than that in the poorest country, Burundi. The natural question then is what is the source of this difference? We will stay away from the political side of the story and look at the economic features. Sandeep Bhaskar (Temple University) Economic Growth 6 / 27
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Explaining Economic Growth What Causes Economic Growth? Causes of economic growth can be broadly classified into two groups: Structural Factors: factors that provide the infrastructure needed for growth. Physical Factors: factors that actually lead to growth. Sandeep Bhaskar (Temple University) Economic Growth 7 / 27
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Explaining Economic Growth Structural Factors Markets Property Rights Monetary Exchange Sandeep Bhaskar (Temple University) Economic Growth 8 / 27
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Explaining Economic Growth Markets Markets are very important since they make the transactions cheaper. They do so by
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economic-growth - Economic Growth Sandeep Bhaskar Temple...

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