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19 Cards in this Set
- Front
- Back
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modern economic growth
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began with the invention of the steam engine in 1776 and the industrial revolution that followed it
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leader countries
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these structures involve establishing strong property rights protecting patents and copyrights maintaing efficient financial institutions
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follower countries
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are often missing one or more of these institutional features
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supply factor
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increase the output potential of the economy
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demand factor
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and the efficiency with which the economy allocates resources the efficiency factor
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growth accounting
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is discussed in the sixth secton of the chapter
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recent productivity acceleration
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a major development in recent years was the almost doubling of the rate of labor productivity form 1995- 2007
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desirable and sustainable
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the eighth and last section of the chapter raises an important question
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economic growth
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can be defined in two ways : as an increase in real GDP over some time period: or as an increase in real GDP over some period of time
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rule of 70
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which involves dividing 70 by the annual percentage rate of growth . The approximate number of years required to double GDP
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Growth accounting
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the two main factors are increases in quantity of labor and productivity
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technological advance
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is combining given amounts of resources in new and innovative ways that result in a larger output
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quantity of capital
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has expanded with the increase in saving and investment spending in capital goods
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infrastructure
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in the US the increase in the quantity of capital goods explains about 30% of productivity growth
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human capital
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has expanded the productivity of workers and has accounted for about 15 % of productivity growth
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economies of scale
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means that there are reductions in the per unit cost for firms as output expands
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improved allocation of resources
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occurs when workers are shifted from lower productivity employment to higher productivity employment in an economy
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productivity growth
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even small ones can have substantial effect on average real hourly wages and the standard of living in an economy
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information technology
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there has been a dramatic rise in entrepreneurship and innovation based on the microchip
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