EconomicGrowthandtheWealthofNations.pptVIP

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EconomicGrowthandtheWealthofNations.ppt

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EconomicGrowthandtheWealthofNations

Economic Growth and the Wealth of NationsChapter 16 * The Importance of Economic Growth Per capita GDP is the nation’s GDP divided by its population. Growth of per capita GDP means more goods and services per person. In most cases, higher levels of per capita GDP will mean that the typical person has a better diet, improved health and access to medical services, a longer life expectancy, and greater educational opportunity. SRAS2005 AD2005 PPC1995 A A Capitalgoods YF1995 RealGDP LRAS1995 PriceLevel Consumptiongoods P1 PPC2005 B B The Importance of Economic Growth Economic growth expands the sustainable output rate YF of an economy. LRAS2005 YF2005 SRAS1995 AD1995 Source: Robert Summers and Alan Heston, Penn World Tables, Mark 5.6 (Cambridge: National Bureau of Economic Research, 1994); and World Bank, World Development Indicators, CD-ROM, 2004. Per-Capita Income(in thousands of 1985 U.S. Dollars) 1960 2002 Argentina Venezuela Japan Hong Kong 2,954 2,247 16,271 19,618 4,462 6,338 5,683 5,585 The growth of per-capita GDP for high-income industrial countries, high-growth LDCs, and low-growth LDCs, (1980–2002) Sources: Derived from World Bank, World Development Indicators, CD-ROM, 2004; and Republic of China, Statistical Yearbook of the Republic of China, 2004. Only countries with a population of 2 million or more in 2002 are included in this table. Japan Australia United States Italy France Germany Canada Switzerland 2.2% 2.1% 1.9% 1.9% 1.8% 1.8% 1.7% 1.7% 1.6% 0.7% Congo (Zaire) -4.9% Sierra Leone -3.3% -2.8% Haiti -2.1% C?te d’lvoire -2.0% Togo -1.8% -1.7% Nicaragua -1.4% Venezuela -1.3% Nigeria -1.1% China 8.1% South Korea 6.1% Taiwan 6.0% Singapore 4.8% Thailand 4.6% Ireland 4.6% Hong Kong 4.4% Differences in Growth Rates among Nations India 4.2% Botswana 3.7% Mauritius 3.6% High-growth LDCs High-income industrial Low-growth LDCs Netherlands United Kingdom Niger Madagascar Ques