ch18LongRun Growth(宏观经济学Karl Case, Ray Fair)概要1.pptVIP

Long-Run Growth Long-Run Growth Economic growth refers to an increase in the total output of an economy. Defined by some economists as an increase of real GDP per capita. Long-Run Growth Modern economic growth is the period of rapid and sustained increase in real output per capita that began in the Western World with the Industrial Revolution. The Growth Process:From Agriculture to Industry The production possibility frontier (ppf) shows all the combinations of output that can be produced if all society’s scarce resources are fully and efficiently employed. The Growth Process:From Agriculture to Industry Before the Industrial Revolution in Great Britain, every society in the world was agrarian. Beginning in England around 1750, technical change and capital accumulation increased productivity in two important industries: agriculture and textiles. More could be produced with fewer resources, leading to new products, more output, and wider choice. The Sources of Economic Growth An aggregate production function is the mathematical representation of the relationship between inputs and national output, or gross domestic product. The Sources of Economic Growth If you think of GDP as a function of both labor and capital, you can see that an increase in GDP can come about through: An increase in the labor supply An increase in physical or human capital An increase in productivity (the amount of product produced by each unit of capital or labor) An Increase in Labor Supply An increasing labor supply can generate more output, but if the capital stock remains fixed, the new labor will be less productive (diminishing returns). An Increase in Labor Supply Malthus and Ricardo predicted a gloomy future as population outstripped the land’s capacity to produce. However, they forgot the impact of technological change and capital accumulation. An Increase in Labor Supply Growth in the labor force, without a corresponding increase in the capital stock or technological change, might