ECON BC 3033x Lecture 9: Lecture 9 Notes
20 Oct 2016
School
Department
Course
Professor
Document Summary
The elusive quest for growth: economists adventures and misadventures in the. Y= ak l1- , where a= technology, k= capital, l= labor y= ak . Poor countries have low capital stock per person. I=sy (where s is constant or fixed) depreciation rate and k is amount of capital) Capital injections will only cause a temporary increase in. Gdp, but then gdp will exceed investment and depreciation will decrease k and as a result gdp will go back to how it was before. Capital stock increases because investment > depreciation. Good for economy but wouldn"t make much of a difference for the country. More people= increase output, increase savings, increase depreciation. Low savings rate less people saving people have less money. Consume more in present than in future. Fundamental drivers in this model is capital stock and how it changes. Building economic models did not start until the 1960"s. Economists mainly debated about communism vs capitalism.
