7: Economic Growth
- Page ID
- 158614
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- 7.1: Introduction to Economic Growth
- This page examines the link between economic growth and calorie consumption, noting a marked increase in available daily food calories for workers from 1800 to 1875. It discusses disparities in living standards across countries and the potential for economic convergence, using South Korea's post-war growth as an example of significant improvement. The chapter emphasizes the potential for enhancing living standards and addresses issues of global poverty and income inequality.
- 7.2: The Relatively Recent Arrival of Economic Growth
- This page explores the economic growth over the last two centuries, driven by the Industrial Revolution, demographic trends, global trade, and technology, particularly in Europe and North America. It highlights how disparities persisted globally despite significant per capita GDP increases in developed nations.
- 7.3: Labor Productivity and Economic Growth
- This page highlights the importance of labor productivity in economic growth, linking it to human capital, technology, and economies of scale, while establishing its measurable impact on GDP per capita. It introduces the aggregate production function and explores historical trends in U.S. productivity.
- 7.4: Components of Economic Growth
- This page outlines the components of economic growth, emphasizing physical capital, human capital, and technology. It highlights capital deepening as a means to enhance productivity and presents growth accounting studies that identify technology as a crucial driver.
- 7.5: Economic Convergence
- This page examines economic convergence, where lower-income economies, like China and India, grow faster than high-income ones due to diminishing returns and technology adoption. It emphasizes the importance of technology and simultaneous capital increases for growth and notes that low-income countries' success in adopting technologies relies on supportive institutions.
- 7.6: Key Terms
- This page provides an overview of essential economic concepts such as the aggregate production function, capital deepening, and the compound growth rate. It highlights the significance of human capital, infrastructure, and labor productivity, alongside the rule of law in safeguarding property rights. Additionally, it discusses innovations, the industrial revolution, modern economic growth, and special economic zones (SEZ) that facilitate tax-free trade.
- 7.7: Key Concepts and Summary
- This page covers the evolution of economic growth from the early 1800s, noting substantial GDP per capita increases in Western countries and recent growth in Japan, South Korea, and China. It highlights labor productivity's role, explaining how minor growth rate variations can significantly impact GDP per capita. Essential factors driving growth include capital deepening and technological advancements, while economic convergence enables poorer nations to catch up through strategic investments.