ECON 201 Chapter Notes - Chapter 11: Thomas Piketty, Production Function, Perspiration
13 Jan 2016
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Economic growth over time and around the world. No economic growth between 1,000,000 b. c. and 1300 a. d. (gdp ) Sustained economic growth begins during industrial revolution (application of mechanical power to production of goods beginning in england around 1750). In the long run, small differences in economic growth rates results in big differences in living standards. Economic growth model: explains growth rates in real gdp per capita over the long run. Labor productivity: quantity of goods or services that can be produced by one worker or by one hour of work. Level of technology quantity of capital per hour worked. Technological change is change in q of output firms can produce using a give q of input. Sources of technological change: better machinery and equipment. 2: better means of organizing and managing production. Country with low gdp per capital can grow fast by: Accumulating capital fast to increase capital per worker. Improving educational system to increase human capital per worker.
