鲁迪格·多恩布什-宏观经济学（第十三版）IPPTChap004.pptVIP

Growth and PolicyChapter #4Copyright ? 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. IntroductionChapter 3 explained how GDP and GDP growth are determined by the savings rate, rate of population growth, and the rate of technological progressThe question analyzed in this chapter is “How do society’s choices affect these parameters?”In many developed countries, invention and advances in technology are the key determinants of growthTechnological advances are much less important for poor countries ? more important to invest in human and physical capital and borrow technological advances from othersEndogenous growth theory (Romer, Lucas) explains how society’s choices lead to technological progress and growth4-2 Trouble With Neoclassical Growth TheoryBy the late 1980’s there was great dissatisfaction with neoclassical growth theory since:It does not explain the economic determinants of technological progressIt predicts that economic growth and savings rates are uncorrelated in the steady stateEndogenous growth theory emphasizes different growth opportunities in physical and knowledge capitalDiminishing marginal returns to physical capital, but perhaps not knowledge capitalThe idea that increased investment in human capital increases growth is key to linking higher savings rates to higher equilibrium growth rates4-3 Mechanics of Endogenous Growth 4-4Need to modify the production function to allow for self-sustaining, endogenous growthFigure 4-1 (a) shows the Solow growth diagram, with the steady state at point C where savings equals required investmentIf savings above required investment, economy is growing as more capital is added ? process continues until savings equals required investment (reach the steady state) Mechanics of Endogenous Growth 4-5Need to modify the production function to allow for self-sustaining, endogenous growthFigure 4-1 (a) shows the Solow growth diagram