McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu....

24
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 28 Economic Growth

Transcript of McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu....

Page 1: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Chapter 28Economic Growth

Page 2: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-2

Economic Growth• IncreaseinrealGDPorrealGDPpercapitaoversometimeperiod• Percentagerateofgrowth• Growthasagoal• Arithmeticofgrowth:Ruleof70

ApproximatenumberofyearsrequiredtodoublerealGDP

=70

annualpercentagerateofgrowth

LO1

Page 3: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-3

Economic Growth Continued• GrowthinU.S.realGDP1950-2015• Increasedmorethansevenfold• 3.1%peryear

• GrowthinU.S.realGDPpercapita• Increasedmorethanthreefold• Atroughly2%peryear

• Qualifications• Improvedproductsandservices• Addedleisure• Otherimpacts

LO1

Page 4: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-4

Economic Growth ConcludedRealGDPandRealGDPperCapita

LO1

Page 5: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-5

Modern Economic Growth• BeganwiththeIndustrialRevolutioninlate1700s• Ongoingincreasesinlivingstandards• Timeforleisure• Socialchange• Democracy• Humanlifespandoubled

LO2

Page 6: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-6

Modern Economic Growth Continued• BeganinBritain• Hasspreadslowly• Startingdatemaincauseofworldwidedifferencesinlivingstandards• Catchingupispossible• Leadercountriesinventtechnology• Followercountriesadopttechnology• Cangrowfaster

LO2

Page 7: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-7

Comparative Modern Economic Growth

RealGDP RealGDP Averageannualpercapita, percapita, growthrate,

Country 1960 2010 1960-2010

UnitedStates $14,766 $41,365 2.1%UnitedKingdom11,25734,268 2.2France 9,347 31,299 2.4Ireland 6,666 34,877 3.3Japan 5,472 31,477 3.5Singapore 4,149 55,862 5.2HongKong 3,849 38,865 4.6SouthKorea 1,765 26,609 5.4Note:GDPfiguresforallcountriesaremeasuredin“internationaldollars”ofequalvaluetoU.S.dollarsin2005.Source:PennWorldTableversion6.3,pwt.econ.upenn.edu.UsedbypermissionoftheCenterforInternationalComparisonsattheUniversityofPennsylvania

LO2

Page 8: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-8

Modern Economic Growth Concluded

LO2

Page 9: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-9

Institutional Structures of Growth• Strongpropertyrights• Patentsandcopyrights• Efficientfinancialinstitutions• Literacyandwidespreadeducation• Freetrade• Competitivemarketsystem

LO2

Page 10: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-10

Determinants of Growth• Supplyfactors• Increasesinquantityandqualityofnaturalresources• Increasesinqualityandquantityofhumanresources• Increasesinthesupply(orstock)ofcapitalgoods• Improvementsintechnology

LO3

Page 11: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-11

Determinants of Growth Continued• Demandfactor• Households,businesses,andgovernmentmustpurchasetheeconomy’sexpandingoutput

• Efficiencyfactor•Mustachieveeconomicefficiencyandfullemployment

LO3

Page 12: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-12

a

EconomicGrowth

b

DB

A

C

ConsumerGoods

CapitalG

oods

c

FromChapter1:Production Possibilities

LO3

Page 13: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-13

Labor and Productivity

•Sizeofemployedlaborforce

•Averagehoursofwork

LaborInputs(hoursofwork)

•Technologicaladvance

•Quantityofcapital

•Educationandtraining

•Allocativeefficiency

•Other

LaborProductivity(averageoutputperhour)

RealGDP

RealGDP=hoursofwork× laborproductivity

×=

LO3

Page 14: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-14

U.S. Economic Growth

Item1953Q2

To1973Q41973Q4

To1995Q21995Q2

To2007Q32007Q3

To2015Q3

Projected2015Q3

To2026Q4

IncreaseinrealGDP 3.6 2.8 3.2 1.2 2.4

Increaseinquantityoflabor 1.1 1.3 0.5 0.1 0.3

Increaseinlaborproductivity 2.5 1.5 2.7 1.1 2.1

AccountingfortheGrowthofU.S.RealGDP,1953-2015,PlusProjectionfrom2015-2026

(AverageAnnualPercentageChanges)

Source: DerivedfromEconomicReportofthePresident,2008,p.45;EconomicReportofthePresident,2016,p.113;BureauofEconomicAnalysis;andBureauofLaborStatistics.

LO3

Page 15: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-15

Accounting for Growth• Factorsaffectingproductivitygrowth• Technologicaladvance(40%)• Quantityofcapital(30%)• Educationandtraining(15%)• Economiesofscaleandresourceallocation(15%)

LO4

Page 16: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-16

Accounting for Growth Continued

AverageTestScoresofEighthGradeStudentsinMathandScience,2011

Mathematics Science

LO4

Page 17: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-17

Productivity Growth• Averagerateofgrowth• 1.5%peryear1973-1995• 2.6%peryear1995-2010• 0.4%peryear2010-2015• Affectsrealoutput,realincome,andrealwages• Payhigherwageswithoutloweringprofit

LO5

Page 18: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-18

Productivity Growth Continued•Microchipandinformationtechnology• Start-upfirmsandincreasingreturns• Sourcesofincreasingreturns•Morespecializedinputs• Spreadingofdevelopmentcosts• Simultaneousconsumption• Networkeffects• Learningbydoing

• GlobalcompetitionLO5

Page 19: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-19

Productivity Growth Concluded

LO5

Page 20: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-20

Productivity Slowdown• Highdebtlevels• Overcapacity• FreeInternetApps• Slowdownintechnologicalprogress

LO5

Page 21: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-21

Global Competitiveness Index

LO6

Page 22: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-22

Is Growth Desirable?• Theantigrowthview• Environmentalandresourceissues• Indefenseofeconomicgrowth• Higherstandardofliving• Humanimaginationcansolveenvironmentalandresourceissues

LO6

Page 23: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-23

Economic Growth Defense• Growthisthepathtogreatermaterialabundance• Resultsinhigherstandardsofliving• Increasesleisuretime• Allowsfortheexpansionandapplicationofhumanknowledge

LO6

Page 24: McConnell 21e IPPT Ch28(1) - mcneileconomics.com Penn World Table version 6.3, pwt.econ.upenn.edu. Used by permission of the Center for International Comparisons at the University

Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.28-24

Can Economic Growth Survive Population Decline?• Asnationsindustrialize,theireconomiesshiftfromagriculturetoindustry• Fertilityratesfall• Decreaseinpopulation• Eachgenerationsmallerthantheonebefore

• Inversedependencyratio• Socialsecurityissues• Innovationandproductivity


Ippt chap001

Ippt chap001

Accounting Ippt

Accounting Ippt

Kotler MM 14e 19 Ippt

Kotler MM 14e 19 Ippt

1,870B ($38) (21E) 3,366ffl ($38) (21E) 141,372 2,200FB ... · 1,870b ($38) (21e) 3,366ffl ($38) (21e) 141,372 2,200fb ($38) (21e) ($38) (21e) / 4 / hsk 3 / 3 / hsk4 / / hsk 5 166,320b

1,870B ($38) (21E) 3,366ffl ($38) (21E) 141,372 2,200FB ... · 1,870b ($38) (21e) 3,366ffl ($38) (21e) 141,372 2,200fb ($38) (21e) ($38) (21e) / 4 / hsk 3 / 3 / hsk4 / / hsk 5 166,320b

Kotler14e ippt ch1

Kotler14e ippt ch1

APMcConnell 21e IPPT Ch11-classjb-hdnp.org/Sarver/AP_Economics/Power_Point_Summaries/Chap011.pdfTitle: Microsoft PowerPoint - APMcConnell_21e_IPPT_Ch11-class [Compatibility Mode] Author:

APMcConnell 21e IPPT Ch11-classjb-hdnp.org/Sarver/AP_Economics/Power_Point_Summaries/Chap011.pdfTitle: Microsoft PowerPoint - APMcConnell_21e_IPPT_Ch11-class [Compatibility Mode] Author:

Cfo10e Ch28 Ge

Cfo10e Ch28 Ge

Howto Fix R Ippt

Howto Fix R Ippt

Ch28 microelectronic devices

Ch28 microelectronic devices

APMcConnell 21e IPPT Ch10-classjb-hdnp.org/.../Power_Point_Summaries/Chap010.pdf · Title: Microsoft PowerPoint - APMcConnell_21e_IPPT_Ch10-class [Compatibility Mode] Author: Bob

APMcConnell 21e IPPT Ch10-classjb-hdnp.org/.../Power_Point_Summaries/Chap010.pdf · Title: Microsoft PowerPoint - APMcConnell_21e_IPPT_Ch10-class [Compatibility Mode] Author: Bob

Kotler MM 14e 11 Ippt

Kotler MM 14e 11 Ippt

APMcConnell 21e IPPT Ch07-class - Compatibility Modejb-hdnp.org/.../Power_Point_Summaries/CH07-Notes-Slides.pdf · 2020. 3. 25. · Title: Microsoft PowerPoint - APMcConnell_21e_IPPT_Ch07-class

APMcConnell 21e IPPT Ch07-class - Compatibility Modejb-hdnp.org/.../Power_Point_Summaries/CH07-Notes-Slides.pdf · 2020. 3. 25. · Title: Microsoft PowerPoint - APMcConnell_21e_IPPT_Ch07-class

ch28 Grandpierre v7

ch28 Grandpierre v7

Kotler MM 14e 09 Ippt

Kotler MM 14e 09 Ippt

Ippt simple present

Ippt simple present

9781284106916 SLCP CH28.pptx

9781284106916 SLCP CH28.pptx

Kotler Mm 14e 05 Ippt

Kotler Mm 14e 05 Ippt

HI-112-10 Ch28

HI-112-10 Ch28

McConnell 21e IPPT Ch28(1) - LAWRENCE MCNEIL, PH.D. · 2019. 11. 28. · Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the

McConnell 21e IPPT Ch28(1) - LAWRENCE MCNEIL, PH.D. · 2019. 11. 28. · Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the

McConnell 21e IPPT Ch27(1) · 2019. 11. 28. · Nominal GDP vs. Real GDP •GDP is a dollar measure of production •Using dollar values creates problems •Nominal GDP •Based on

McConnell 21e IPPT Ch27(1) · 2019. 11. 28. · Nominal GDP vs. Real GDP •GDP is a dollar measure of production •Using dollar values creates problems •Nominal GDP •Based on