ch08中级宏观PPT概要1.ppt

Learning objectives Technological progress in the Solow model Policies to promote growth Growth empirics: Confronting the theory with facts Endogenous growth: simple model in which the rate of technological progress is endogenous Introduction In the Solow model of Chapter 7, the production technology is held constant income per capita is constant in the steady state. Neither point is true in the real world: 1929-2001: U.S. real GDP per person grew by a factor of 4.8, or 2.2% per year. examples of technological progress abound(see next slide) Examples of technological progress 1970: 50,000 computers in the world2000: 51% of U.S. households have 1 or more computers The real price of computer power has fallen an average of 30% per year over the past three decades. 1981: 213 computers connected to the Internet2000: 60 million computers connected to the Internet Tech. progress in the Solow model A new variable: E = labor efficiency Assume: Technological progress is labor-augmenting: it increases labor efficiency at the exogenous rate g: Tech. progress in the Solow model We now write the production function as: Tech. progress in the Solow model Notation: y = Y/LE = output per effective worker k = K/LE = capital per effective worker Production function per effective worker: y = f(k) Saving and investment per effective worker: s y = s f(k) Tech. progress in the Solow model (? + n + g)k = break-even investment: the amount of investment necessary to keep k constant. Consists of: ? k to replace depreciating capital n k to provide capital for new workers g k to provide capital for the new “effective” workers created by technological progress Tech. progress in the Solow model Steady-State Growth Rates in the Solow Model with Tech. Progress The Golden Rule Policies to promote growth Four policy questions: Are we saving enough? Too much? What policies might change the saving rate? How should we allocate our investment between