ECON1132 Chapter Notes - Chapter 11: Foreign Portfolio Investment, Creative Destruction, Human Capital Flight
3 Apr 2016
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Chapter 11: long run economic growth: sources and policies. Economic growth is not inevitable (many countries do not grow and live in poverty) Growth = increase in labor producivity (output produced per worker), which depends on investment. Growing economy provides both an increase in the g/s produced, but beter g/s too. Industrial revoluion: 1750 england, the applicaion of mechanical power to the producion of goods: beginning of sustained economic growth, moved away from purely human or animal labor, but brought in machinery. Small diferences in growth rates make a big diference over ime: compounding magniies small diferences over ime, makes a big diference in long run standards of living. Slow growth rate means poverty: note: growth rate is not equal to percent change. Industrial country = high income; developing country = low income. Economic growth model: a model that explains growth rates in terms of gdp per capita over ime.
