ECON 402 Lecture 8: Chapter 8.1
ECON 402 verified notes
8/30View all
Document Summary
Overview: closed economy solow model, country standard of living dependency its saving and population growth rates, golden rule and application. Infant mortality rate: 20% in the poorest 1/5 countries, 0. 4 % in the richest 1/5 countries. 25% of the poorest countries have had famines in the past 3 decades. Poverty is also associated with oppression of woman and minorities. Economic growth raises living standards and reduce poverty. Any small change in the long run growth rate, even by a tiny amount, will have a huge effects on living standard in the long run. Build by robert solow: widely used in policy making, benchmark against which most recent growth theory, use determinants of growth and standard living in the long run. Difference with chapter 3 model: k is not fixed anymore, l is not fixed, simpler consumption function, no g or t, cosmetic differences. Y = c +i ; c= c/l and i = i/l.
