EC140 Lecture Notes - Lecture 17: Per Capita Income, Potential Output, Savings Account
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Document Summary
Introduction: economic growth is about how potential output grows, there are three perspectives 1. Growth in the overall level of output: 1. Growth in the average per capita income also called output per person: 2. Rule 72: the approximate time taken for a variable to double is calculated by dividing 72 by the variable"s growth rate. The economist june 14th, 2001: there is almost no doubt that why growth does or does not occur in a specific setting is the central policy question (along with pollution) The aggregate production function: gdp = ft (l, h, k ) L quantity of labour in the entire economy h quality of labour - often called human capital . If the number of births is larger than the number of deaths l grows: you can also have a larger proportion of your existing population work. If a country has a more immigrants than emigrants, l grows.
