上财宏观经济学Macroeconomic--23EconmicGrowth.pptVIP

The Basics of Economic Growth Economic growth is the sustained expansion of production possibilities measured as the increase in real GDP over a given period. Calculating Growth Rates The economic growth rate is the annual percentage change of real GDP. The economic growth rate tells us how rapidly the total economy is expanding. The Basics of Economic Growth The standard of living depends on real GDP per person. Real GDP per person is real GDP divided by the population. Real GDP per person grows only if real GDP grows faster than the population grows. The Basics of Economic Growth The Magic of Sustained Growth The Rule of 70 states that the number of years it takes for the level of a variable to double is approximately 70 divided by the annual percentage growth rate of the variable. The Basics of Economic Growth Applying the Rule of 70 Figure 23.1 show the doubling time for growth rates. A variable that grows at 7 percent a year doubles in 10 years. A variable that grows at 2 percent a year doubles in 35 years. A variable that grows at 1 percent a year doubles in 70 years. Economic Growth Trends Growth in the U.S. Economy From 1908 to 2008, growth in real GDP per person in the United States averaged 2 percent a year. Real GDP per person fell precipitously during the Great Depression and rose rapidly during World War II. Growth was most rapid during the 1960s. Growth slowed during the 1970s and sped up again in the 1980s and1990s. Figure 23.2 on the next slide illustrates. Economic Growth Trends Real GDP Growth in the World Economy Figure 23.3(a) shows the growth in the rich countries. Growth in the United States, Canada, and Europe Big 4 has been similar. Japan grew rapidly in the 1960s, slower in the 1980s, and even slower in the 1990s. Economic Growth Trends Figure 23.3(b) shows the growth of real GDP per person in group of poor countries. The gaps between real GDP per person in the United States and in these countries have widened. How Potential GDP Grow