econ 80a lecture 6

econ 80a lecture 6 - KEYNES-OUR GRANDCHILDREN "We are...

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KEYNES-- OUR GRANDCHILDREN "We are suffering just now [1930] from a bad attack of economic pessimism . [that economic progress is at an end] . .I believe that this is a wildly mistaken interpretation We are suffering not from the rheumatics of old age, but from the growing pains of over-rapid changes, from the painfulness of readjustment between one economic period and another. The prevailing world depression blind us to what is going on under the surface For I predict that both of the two opposed errors of pessimism which now make so much noise in the world will be proved wrong in our own time-- the pessimism of the revolutionaries who think that things are so bad that nothing can save us but violent change, and the pessimism of the reactionaries who consider the balance of our economic and social life so precarious that we must risk no experiments." KEYNES IS SPECULATING ON THE NEXT 100 YEARS WHAT THINGS WILL LOOK LIKE IN 2030. Our early history to the 18 th century, a time of no growth, just cycles è absence of technological change, and è absence of capital accumulation. but with capital accumulation and the LAW OF COMPOUND INTEREST our problems will soon be over!! [divide the growth rate into 70, and you will know how long it takes for things to double; e.g., with a 3 percent growth, GDP/capita will double every 23 years. If average real income is $20,000 today, it will be 40k in 2025; 80 in 2048;
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This note was uploaded on 09/18/2011 for the course ECON 80a taught by Professor Kaun,d during the Spring '08 term at UCSC.

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econ 80a lecture 6 - KEYNES-OUR GRANDCHILDREN "We are...

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