tailieunhanh - Lecture Principles of economics - Chapter 18: Economic growth

This chapter focuses on the sources of economic growth and rising standards of living across the world. The chapter also discusses government policies to promote economic growth, the costs of rapid economic growth, and whether there may be limits to economic growth. | Economic Growth Chapter 18 McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. Learning Objectives Show how small differences in growth rates can lead to large differences in living standards Explain why GDP per capita is the product of average labor productivity times the proportion of the population employed and use this decomposition to discuss the sources of growth Discuss the determinants of average labor productivity within a particular country and use these concepts to analyze per capita GDP differences across countries Discuss and evaluate government policies that promote economic growth Compare and contrast the benefits of economic growth with its costs Describe the trade-offs between economic growth and environmental quality Benefits of Growth In the late 18th and early 19th century Life expectancy was 40 years Most families had 2 or 3 children die Nothing moved faster than the speed of a horse The best highway was from Boston to New York | Economic Growth Chapter 18 McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. Learning Objectives Show how small differences in growth rates can lead to large differences in living standards Explain why GDP per capita is the product of average labor productivity times the proportion of the population employed and use this decomposition to discuss the sources of growth Discuss the determinants of average labor productivity within a particular country and use these concepts to analyze per capita GDP differences across countries Discuss and evaluate government policies that promote economic growth Compare and contrast the benefits of economic growth with its costs Describe the trade-offs between economic growth and environmental quality Benefits of Growth In the late 18th and early 19th century Life expectancy was 40 years Most families had 2 or 3 children die Nothing moved faster than the speed of a horse The best highway was from Boston to New York A stagecoach made the 175-mile trip in 3 days Pace of technical change is accelerating Inventions are not sufficient to create growth Products must be commercialized and sold Living Standards Use an economic model to study the remarkable rise in living standards Real GDP per person is a measure of the goods available to a typical person One clue to growing prosperity in the 20th century – GDP per person today is five times greater than it was in 1929 Comparisons across long periods are complicated by lack of data The variety, quantity, and quality of goods increased enormously in the 19th and 20th century Real GDP per Person, 1870-2008 (in US Dollars) Real GDP per Person, 1870 - 2008 Country 1870 1913 1950 1979 1990 2008 US $2,445 $5,301 $9,561 $18,789 $23,201 31,178 UK 3,190 4,921 6,939 13,167 16,430 23,742 Germany 1,839 3,648 3,881 13,993 15,929 20,801 Japan 737 1,387 1,921 13,163 18,789 22,816 China 530 552 448 1,039 1,871 6,725 Brazil 713 811 1,672 4,890 4,920 6,429 India 533 673