MACROECONOMICS
CHAPTER 8
ECONOMIC GROWTH AND PRODUCTIVITY
,Chapter Outline:
The Basics of Economic Growth
The Growth Process: From Agriculture to Industry
Sources of Economic Growth
Increase in Labor Supply
Increase in Physical Capital
Increase in the Quality of the Labor Supply (Human Capital)
Increase in the Quality of Capital (Embodied Technical
Change)
Disembodied Technical Change
More on Technical Change
,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.
CHAPTER 8
ECONOMIC GROWTH AND PRODUCTIVITY
,Chapter Outline:
The Basics of Economic Growth
The Growth Process: From Agriculture to Industry
Sources of Economic Growth
Increase in Labor Supply
Increase in Physical Capital
Increase in the Quality of the Labor Supply (Human Capital)
Increase in the Quality of Capital (Embodied Technical
Change)
Disembodied Technical Change
More on Technical Change
,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.
