40 Ch16 Economic Growth Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY Ch16 Economic Growth
1907 19-2 Economic Growth is Often measured by the rate of change of real GDP although this has many deficiencies it omits output that is not bought/sold .e.g.leisure,pollution,congestion it also neglects income distribution so higher GDP per capita does not necessarily mean greater happiness - but it helps. Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 19-2 Economic Growth is • Often measured by the rate of change of real GDP – although this has many deficiencies – it omits output that is not bought/sold • e.g. leisure, pollution, congestion – it also neglects income distribution • so higher GDP per capita does not necessarily mean greater happiness – but it helps
19-3 The production function... shows the maximum output that can be produced using specified quantities of inputs,given existing technical knowledge ·Output=f(capital labour land raw materials technology) Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 19-3 The production function... • shows the maximum output that can be produced using specified quantities of inputs, given existing technical knowledge • Output = f(capital – labour – land – raw materials – technology)
1907 19-4 Increasing output Capital output per worker may increase with capital per worker 。Labour -population growth participation rates -human capital ·Land -fixed supply,but quality may be improved Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 19-4 Increasing output • Capital – output per worker may increase with capital per worker • Labour – population growth – participation rates – human capital • Land – fixed supply, but quality may be improved
19-5 0 Increasing output (2) ·Raw materials -important distinction between depletable resources(coal,oil) renewable resources(timber,fish) ·Technical knowledge inventions,R&D Economies of scale may reinforce the long-run growth process Economics ECONOMICS MANAGEMENT SCHOOL,TONGJI UNIVERSITY
Economics ECONOMICS & MANAGEMENT SCHOOL, TONGJI UNIVERSITY 19-5 • Raw materials – important distinction between • depletable resources (coal,oil) • renewable resources (timber, fish) • Technical knowledge – inventions, R&D • Economies of scale may reinforce the long-run growth process Increasing output (2)