GROWTHCLASS - 1 1 Economic Growth ¡ 3% real GDP per year...

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Unformatted text preview: 1 1 Economic Growth ¡ 3% real GDP per year ¡ 2% real per capita GDP per year ¢ GDP/Pop ¢ Doubles every 36 years – rule of 72 ¢ Doubled since 1972 ¡ PRODUCTIVITY ¢ Output per worker (manhour) Y/L ¢ Y=Y/L*L ¢ Y/POP=Y/L*L/POP ¡ Interrupted but ongoing 2 Growth is Relatively New 3 In the News? 2 4 Course Issues ¡ Aresty 4/23 5 Application -Growth Rates of Real Per Capita GDP ¢ China in 2000 = U.S. in 1870 1.9 3,940 598 China 1900 1,960 26,460 23,550 34,260 2000 1.16 616 Pak 1900 2.8 1,256 Japan 1890 1.35 4,107 U.K. 1870 1.8 3,347 U.S. 1870 % ch start ¢ China catch-up 2% v 9% 2009 figures ¢ (41,646)e ( n*.02 )=(2,494) e ( n*.09 ) -> 41,646/2,494 = e ( n*.09-.02 ) ¢->ln(41,646/2,494)= ln(e ( n*(.09-.02 ) )= ln(16.6)=n*.07=2.809/.07=40.13 years ¢ US: 41,646e(40.13*.02)=92,926 ¡ Note China now, where U.S. was in 1860-70? BUT 6 Costs and Benefits of Economic Growth ¡ Benefits ¢ progress ¢ Increased output, income/ wealth ¢ improved Yuality of life ¢ basis for solving problems – environmental, ineYuality, poverty ¡ Costs ¢ foregone consumption (shifted to investment) ¢ possible resource depletion ¢ possible loss in Yuality of life....
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This note was uploaded on 09/30/2011 for the course ECONOMICS 103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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GROWTHCLASS - 1 1 Economic Growth ¡ 3% real GDP per year...

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