Lec06handout

Lec06handout - Production and Growth Slide #06 July 13 2010...

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Production and Growth Slide #06 July 13 2010 Intro Macro 1
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Economic Growth Around the World Real GDP per person Living standard Vary widely from country to country Growth rate How rapidly real GDP per person grew in the typical year Because of differences in growth rates Ranking of countries by income changes substantially over time Intro Macro 2
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The variety of growth experiences 1 3 Country Period Real GDP per person at beginning of period Real GDP per person at end of period Growth rate (per year) Japan Brazil China Mexico Germany Canada Argentina United States India United Kingdom Indonesia Bangladesh Pakistan 1890 2006 1900 2006 1900 2006 1900 2006 1870 2006 1870 2006 1900 2006 1870 2006 1900 2006 1870 2006 1900 2006 1900 2006 1900 2006 $1,408 729 670 1,085 2,045 2,224 2,147 3,752 632 4,502 834 583 690 $33,150 8,880 7,740 11,410 31,830 34,610 15,390 44,260 3,800 35,580 3,950 2,340 2,500 2.76% 2.39 2.34 2.24 2.04 2.04 1.88 1.83 1.71 1.53 1.48 1.32 1.22
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Incomes and Growth Around the World Why are some countries richer than others? Why do some countries grow quickly while others seem stuck in a poverty trap? What policies may help raise growth rates and long-run living standards? Intro Macro 4
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Productivity: its Role and Determinants Productivity Quantity of goods and services Produced from each unit of labor input Y = real GDP = quantity of output produced L = quantity of labor so productivity = Y/L (output per worker) Why productivity is so important Key determinant of living standards An economy’s income is the economy’s output Intro Macro 5
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Productivity: its Role and Determinants How productivity is determined Physical capital Stock of equipment and structures Used to produce goods and services Human capital Knowledge and skills that workers acquire through education, training, and experience Intro Macro 6
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Productivity: its Role and Determinants How productivity is determined Natural resources Inputs into the production of goods and services Provided by nature, such as land, rivers, and mineral deposits Technological knowledge Society’s understanding of the best ways to produce goods and services Intro Macro 7
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Tech. Knowledge vs. Human Capital Technological knowledge refers to society’s
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This document was uploaded on 10/28/2011 for the course 220 103 at Rutgers.

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Lec06handout - Production and Growth Slide #06 July 13 2010...

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