《宏观经济学教学课件》Chapter_03.pptVIP

Introduction Per capita GDP = income per person has been increasing over time in industrialized nations, yet remains stagnant in many developing nations (Ex. U.S. vs. Ghana) Growth accounting explains what part of growth in total output is due to growth in different factors of production Growth theory helps us understand how economic decisions determine the accumulation of factors of production Ex. How does the rate of saving today affect the stock of capital in the future? The Production Function The production function defines the relationship between inputs Can use the production function to study two sources of output growth: Increases in inputs (N, K) Increases in productivity (technology) If N and K are the only inputs, the production function is (1), where output depends upon inputs and technology (A) An increase in A = increase in productivity ? output increases for given level of inputs N and K Assume MPN and MPK 0, so that an increase in inputs ? increase in output Growth Accounting Equation Equation (1) relates the level of output to the level of inputs and technology Transform the production function into growth rate form to show the relationship between input growth and output growth The growth accounting equation is: (2) Growth rates of K and N are weighted by their respective income shares, so that each input contributes an amount equal to the product of the input’s growth rate and their share of income to output growth Growth Accounting: Examples If , the growth rates of N and K are 1.2% and 3% respectively, and the rate of technological progress is 1.5%, then output growth is: Since labor share is greater than capital share, a 1% point increase in labor increases output by more than a 1% point increase in capital