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Chapter 4

Chapter 4 The World's Population.pdf

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Boston University
CAS EC 102
Jay Zagorsky

Chapter 4: The World's Population Tuesday, January 21, 2014 3:46 PM - Populations of cities, nations and the world are key macro variables ○ Growing population means more investorsand workers ○ Consumer demand shifts to the right ○ More workers shifts the supply curve to the right ○ Shrinking population hurts the real estate market ○ Growing population lowers prices, vice versa  Also spreads the tax burden; gov't has less need to tax businesses I. How Does MacroeconomicsCause Population Change? ○ Four factors that change population  Births, deaths, immigration and emigration □ When people are economicallybetter, they give more births and can afford better healthcare  During good economictimes, people immigratefor opportunities and people emigrate during bad times 1) Change in Population = (Births + Immigrants) - (Deaths + Emigrants) a. Adjusting Business Data ○ Better data can be drawn by comparing by per person, not country  China and Belgium GDP  When countries have very different populations, not using GDP can make for a biased result ○ Population growth can eliminate economicprogress  If population grows faster than economicgrowth, the GDP will fall  Many countries are trying to control their population to raise their GDP; China's 1 child per family policy and India gave a large incentive for people to get sterilized b. Size of the World's Population ○ According to the UN, the population is supposed to grow from the current 7 billion to 10 billion people until it drops slightly and reach a steady plateau ○ At the end of the 1920s,population rapidly grew and the pace of population growth is rising ○ Most of the world's population resides in Asia  China, India, Indonesia, Pakistan, Bangladesh and Japan ○ Each year, 77 million more people are living on the earth (size of Egypt) ○ Birth rate has gone down by 1/2 but people are living longer (people live about 50% longer than 1950s)  UAE, Qatar, Bahrain, Yemen and Jordan are the fastest growing countries in the world □ Businesses in those countries are rapidly expanding  Latvia, Estonia and Bulgaria are the fastest shrinking countries c. Size of the World's Population ○ Steady growth of population in the US (60%) II. Math: Percentage Change Formulas ○ Track if the population is growing or shrinking  Percentage Change 1 = (New Value - Old Value)/Old Value (Book formula and most commonlyused in stock)  Percentage Change 2 = (New Value - Old Value)/New Value  Percentage Change 3 = ln(New Value) - ln(Old Value) ○ Which formula to use? (They all give different answers) III. Where Are Population Data? III. Where Are Population Data? ○ UN collects detailed information on the population  "World PopulationProspects":tracks both current and projections □ Tracks basic data on population and 5 year densities □ Also detailed breaks downs by age, sex and life expectancy  Women are having less and less childr
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