ECON 219 Chapter Notes -Per Capita Income, Real Interest Rate
4 Jan 2013
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ECON 219 Full Course Notes
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The current fiscal squeeze: the acceleration of public spending on age-related programs and the slowing of tax revenues. It will force governments at all levels to make difficult fiscal decisions, choosing among reductions in expenditure programs, increases in tax rates, and higher budget deficits. Falling labour worker rates will result in a decline in growth of material living standards. (gdp/pop)=(gdp/e)x(e/lf)x(lf/pop) (increase of about 0. 1%) E=level of employment, so (gdp/e)=measure of labour productivity (annual increase of about. Lf=size of labour force, so (e/lf) is the employment rate (long run stability result in little long run effects) stable stable. Significant increase (more females in workforce and coming of age of baby boomers) decrease-- Overall, the decrease in the labour force will result in a slower rate of growth of gdp. Increase in number of people willing to work increases gdp per capita. Also due to productivity growth (workers get better)
