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24 Cards in this Set
- Front
- Back
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convergence toward the steady state
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the process by which GDP per worker in a country will grow or shrink from some initial position towards its steady-state level
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endogenous variables
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variables that are determined within an economic model
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diminishing marginal product
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a property of production function implying that if we keep adding units of a single input (holding quantities of others fixed) the quantity of the new output that each new unit produces will be smaller than that added by the previous unit of the input
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difference (in a variable)
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the change in the value of a variable from one time period to the next
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depreciation
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the wearing-out of capital
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Cobb-Douglas production function
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a specific functional form of the production function defined as
F(K,L) = AK^aL^(1-a) K= capital L = labor A = productivity a = parameter between 0 and 1 |
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capital's share of national income
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the fraction of national income that is paid out as rent on capital. if the production function is the Cobb_Douglas and factors of production are paid to their marginal products, then the parameter "a" is equal to capital's share of national income
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growth rate
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change in a variable from one year to the next divided by the value of the variable in the initial year
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constant returns to scale
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a characteristic of a production fnc such that when we multiply the quantities of each input by some factor , the quantity of output will increase by that same factor
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steady-state
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a condition of the economy in which output per worker and capital per worker do not change over time
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exogenous variables
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variables that are taken as given when an economic model is analyzed
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investment
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goods and services devoted to the production of new capital rather than consumption
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capital
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tools that workers have at their disposal to produce goods and services
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marginal product
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the extra output produced when one more unit of a particular input is used in production
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multiple steady states
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a phenomenon in which a country's initial position determines which of several steady states it will move toward
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net rate of reproduction (NRR)
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the number of daughters that each girl who is born can be exprected to give birth to, assuming she goes through her life with the mortality and fertility of the current population
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capital dilution
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the negative effect of pop. growth on capital per worker
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fertility transition
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the decline in the birthrate that accompanies economic development
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age-specific fertility rate
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the average number of children that a woman of a given age will bear in a given year
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total fertility rate (TFR)
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number of children a woman would have if she lived through all her childbearing years and experienced the current age-specific fertility rates at each age
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demographic transition
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process by which a country's mortality and fertility rates decline as it develops
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survivorship function
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a function showing the probability that a person will be alive at different ages
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life expectancy at birth
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average number of years that a newborn baby can be expected to live
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mortality transition
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increase in life expectancy that accompanies economic development
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