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# EC4004 Lecture1 Growth Matters

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### EC4004 Lecture1 Growth Matters

1. 1. EC4004 Lecture 1 Lecture 1 Growth Matters
2. 3. <1> <2> Setup Recap <3> Growth Matters
3. 4. <1> Setup
4. 5. 087 399 8306
5. 6. Volunteers Email if you don’t want to be one
6. 7. www.stephenkinsella.net
7. 8. Office: KB 3-46 [email_address] Office Hours: TBA
8. 9. </1> Setup
9. 10. <2> Recap
10. 11. 1. Economic Models 2. Supply and Demand 3. Measuring the Macroeconomy (Handout)
11. 12. </2> Recap
12. 13. <3> Growth Matters
13. 14. <ul><li>GDP: Sum of all final goods and services produced in the economy </li></ul>
14. 15. Growth rate of real GDP for year t = (( Yt− Yt−1)/ Yt−1)− 1 Multiply by 100 to get the growth rate of real GDP in percent per year.
15. 16. Example: Y2006=105; Y2005=100 Growth Rate = 105-100/100-1*100 =5%
16. 17. <ul><li>National Income Accounting </li></ul><ul><li>Nominal GDP measures the Euro (or dollar, etc.) value of all the goods and services that an economy produces during a specified period, such as a year. </li></ul><ul><li>Flow variable - it measures the Euro amount of goods produced per unit of time, such as a year. </li></ul><ul><li>GDP in current Euros </li></ul>
17. 18. <ul><li>Calculating Real GDP </li></ul><ul><li>Multiply each year’s quantity of output of each good by the price of the good in a base year. </li></ul><ul><li>GDP in constant Euros </li></ul><ul><li>Chain-weighted real GDP </li></ul>
18. 19. <ul><li>(nominal GDP)/(implicit price level) = real GDP </li></ul><ul><li>or </li></ul><ul><li>implicit price level = (nominal GDP)/(real GDP) </li></ul>
19. 20. <ul><li>www.gapminder.org </li></ul>
20. 21. </3> Growth Matters
21. 22. 086 399 83 06
22. 23. Next Time Growth Theory Read Barro Chapter 3