Intro Flashcards
What is the growth rate rule of thumb
It takes 70/g years for GDP to double
Define economic growth
The increase in value of goods and services produced by an economy. Conventionally measured as the percent rate increase in real GDP
Give 2 pros of using GDP per capita
It has a positive correlation with:
- life expectancy
- consumption
Give 3 negatives of using GDP per capita
- No info about distribution
- Goods outside of marketplace not included
- includes negative spending
Give 5 facts about growth trends
1) Enormous variation in per capita income across economies
2) substantial and persistent differences in growth rates too
3) Economic growth is a very recent phenomenon
4) Once started, it is a persistent phenomenon
5) The takeoff occurs at different times for various world regions
Give 4 Kalsor stylised facts
1) Many countries experience not only sustained, but also balanced growth
2) Real Capital/Output ratio roughly constant
3) Real return to capital and real interest rate are approximately constant
4) Fraction of income capital owners/ workers roughly constant
Give the 3 broad causes of economic growth
1) Physical capital accumulation
2) Human capital accumulation
3) Growth of stock of knowledge (technical progress)