EC140 Lecture Notes - Lecture 13: Real Interest Rate, Loanable Funds, Longrun
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EC140 Full Course Notes
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Benefits of economic growth rising average living standards alleviation of poverty: many do not share directly in the growth, but redistribution is easier in a growing economy. Sources of economic growth the four fundamental sources of economic growth are: growth in the labour force, growth in human capital, growth in physical capital. 4. technological improvement different theories emphasize different sources of growth. Established theories of economic growth a long-run analysis: using the equilibrium condition in the simplest short-run macro model we get: Y =c + i or y c=i or s=i: short run y varies to determine equilibrium, in which s = i, long run y = y* and the interest rate varies to determine equilibrium. T c public selling=t g national saving= private saving+ public saving. Ns=y t c+(t g) ns=y c g if c is negatively related to the interest rate, then ns is positively related to the interest rate.
