ECON10003 Lecture Notes - Lecture 8: Physical Capital, Capital Accumulation, Total Factor Productivity
Document Summary
Chapter 11: the economy in the long run. Increase in material living standards by people in industrialized countries: ig(cid:374)ifi(cid:272)a(cid:374)tl(cid:455) la(cid:396)ge p(cid:396)opo(cid:396)tio(cid:374) of (cid:449)o(cid:396)ld(cid:859)s populatio(cid:374) ha(cid:448)e(cid:374)(cid:859)t had sa(cid:373)e (cid:396)esults. I(cid:374) sho(cid:396)t (cid:396)u(cid:374) (cid:894)ti(cid:373)e pe(cid:396)iod (cid:449)he(cid:396)e p(cid:396)i(cid:272)es do(cid:374)(cid:859)t (cid:396)espo(cid:374)d to output gaps(cid:895) output i(cid:374) e(cid:272)o(cid:374)o(cid:373)(cid:455) is dete(cid:396)(cid:373)i(cid:374)ed (cid:271)(cid:455) pae (cid:271)e(cid:272)ause fi(cid:396)(cid:373)s a(cid:396)e assu(cid:373)ed to suppl(cid:455) (cid:449)hate(cid:448)e(cid:396)(cid:859)s de(cid:373)a(cid:374)ded i(cid:374) sho(cid:396)t (cid:396)u(cid:374) Compound interest: an arrangement in which interest is paid not only on the original deposit but on all previously accumulated interest. Simple interest: interest is paid only on original deposit. 11. 4 why nations become rich: the crucial role of average labour productivity. To get i(cid:374)sight, it(cid:859)s useful to express real. Gdp per person as product of two terms: average labour productivity and the share of the population that is working. Everything else being equal, a culture that promotes hard work tends to increase worker p(cid:396)odu(cid:272)ti(cid:448)it(cid:455). But i(cid:374)te(cid:374)sit(cid:455) of effo(cid:396)t alo(cid:374)e (cid:272)a(cid:374)(cid:859)t e(cid:454)plai(cid:374) diffe(cid:396)e(cid:374)(cid:272)es i(cid:374) a(cid:448)g. la(cid:271)ou(cid:396) productivity around the world.
