ECON 102 Lecture Notes - Lecture 8: Robert Solow, Indian Railways, Market Structure

• School: UBC
• Department: Economics
• Course: ECON 102
• Professor: Ratna Shrestha

Document Summary

Sustained increases in y* are more powerful method of raising material living standards than the removal of recessionary gaps. Even small differences in annual growth rates can result in large changes in living standards after many years (in the lr). Consider real gdp, real per capita gdp, and real gdp per employed worker. These three variables show different aspects of economic growth. As shown in the next table, even a small differences in growth rate can make profound differences in material living standard over generations. Calculation of real gdp= yo x (1+g) ^n. Growth in real gdp > growth in real per capita gdp due to population growth. Growth in real per capita gdp > growth in real gdp per worker due to faster increase in level of employment than population. Benefits of economic growth: rising average living standards. A slight increase in growth rate can bring a substantial increase in living standards.