The document discusses economic growth and productivity in the United States and other countries. It defines economic growth and outlines global trends, showing that growth rates increased after the Industrial Revolution but have varied over time in the US. Growth depends on factors like capital investment, technological progress, and human capital. While growth slowed in the US between 1973-1994, it increased again in the mid-1990s possibly due to information technology and a "new economy." Overall the document examines drivers of and fluctuations in economic growth rates globally and nationally.
The document provides a general overview of the economy in Sri Lanka from the time of Independence in 1948 to the Present era in terms of policy changes, the general affect on different regime changes on the economy and how they have molded the present situation in Sri Lanka in a macro economic perspective.
THE CHALLENGE OF INFLATION AND ITS CONSUMPTION RELATIONpaperpublications3
Abstract: Indian economy is a developing economy and it faces many challenges from all directions. It also faces some extra challenges not only economic but also from other sectors of society. In this paper the challenge of inflation and its consumption relation is explained. Many economic experts and political world leaders accused Indian consumers for the world inflation rise. Indian particularly middle and lower income families feet the heat of the inflation more intensively than higher income group peoples. Inflation is basically problem of demand and supply equation, but many other factors also involved in it. Some dilemma of the inflation is presented in this paper. Not only people of India but also the central and states governments are also afraid of inflation. Many economists we well as politicians assumed that inflation is affecting the consumption or the consumer is the cause of inflation.
ECN211 Chapter 9 Worksheet – Inflation
1. Define inflation.
Section 9.1 – Tracking Inflation
2. What is meant by the basket of goods and services?
3. A. Fill in the missing cells below. Calculate total expenditures in the current year and in the base year.
Market Basket
Current Year Prices (per item)
Current-Year Expenditures
Base-Year Prices (per item)
Base-Year Expenditures
5 gallons of gas
$2.50
$2.00
10 packs of Top Ramon
$1.20
$1.50
4 bottles of Coca-Cola
$1.50
$1.25
8 frozen lasagna dinners
$5.00
$4.50
Total dollar expenditures: _____________ _________
4. Calculate the price index from the information in question 3. How much have average prices risen since the base year?
5. You discover that for a particular country, the price index increased from 212 to 218 between on year and the next. How much has the price level risen since the “base year”? What is the annual rate of inflation?
Section 9.2 – How Changes in the Cost of Living are Measured
6. What is the consumer price index (CPI)?
7. Discuss how measuring inflation can be misleading given the substitution bias and quality/new goods bias. How has the Bureau of Labor Statistics attempted to address it as of late?
8. List in order of biggest to smallest the eight major categories of the CPI (Figure 9.2).
9. How is core inflation index different from regular CPI?
10. Describe the other types of price indices
a. Producer Price Index (PPI)
b. International Price Index
c. Employment Cost Index
d. GDP deflator
Section 9.3 – How the US and Other Countries Experience Inflation
11. Assess the trends in the US price level and inflation rates over the last 100 years, as well as over the last 30 years (Figure 9.3).
12. Define deflation, and identify two areas in US economic history where it occurred.
13. Define hyperinflation and identify some examples of this through history.
Section 9.4– What Causes Changes in Unemployment over the Long Run
14. Describe how high rates of inflation impacts the following groups :
a. Between those who save and lend money and those that borrow money
b. Employers and employees?
c. Retirees living on a fixed income?
15. Describe the trend in the minimum wage over the last 50 years (Figure 9.6).
16. How can high rates of inflation “blur” price signals for both buyers and sellers in an economy?
17. How can inflation make long-term planning more difficult for both workers/households and firms?
18. Why are low rates of inflation preferred to deflation?
19. How can inflation “oil the gears" or make the labor market for flexible?
Section 9.5– Indexing and its Limitations
20. What does it mean for price, wages, or interest rates to be “indexed”?
21. Describe “cost-of-living-adjustment ...
The document provides a general overview of the economy in Sri Lanka from the time of Independence in 1948 to the Present era in terms of policy changes, the general affect on different regime changes on the economy and how they have molded the present situation in Sri Lanka in a macro economic perspective.
THE CHALLENGE OF INFLATION AND ITS CONSUMPTION RELATIONpaperpublications3
Abstract: Indian economy is a developing economy and it faces many challenges from all directions. It also faces some extra challenges not only economic but also from other sectors of society. In this paper the challenge of inflation and its consumption relation is explained. Many economic experts and political world leaders accused Indian consumers for the world inflation rise. Indian particularly middle and lower income families feet the heat of the inflation more intensively than higher income group peoples. Inflation is basically problem of demand and supply equation, but many other factors also involved in it. Some dilemma of the inflation is presented in this paper. Not only people of India but also the central and states governments are also afraid of inflation. Many economists we well as politicians assumed that inflation is affecting the consumption or the consumer is the cause of inflation.
ECN211 Chapter 9 Worksheet – Inflation
1. Define inflation.
Section 9.1 – Tracking Inflation
2. What is meant by the basket of goods and services?
3. A. Fill in the missing cells below. Calculate total expenditures in the current year and in the base year.
Market Basket
Current Year Prices (per item)
Current-Year Expenditures
Base-Year Prices (per item)
Base-Year Expenditures
5 gallons of gas
$2.50
$2.00
10 packs of Top Ramon
$1.20
$1.50
4 bottles of Coca-Cola
$1.50
$1.25
8 frozen lasagna dinners
$5.00
$4.50
Total dollar expenditures: _____________ _________
4. Calculate the price index from the information in question 3. How much have average prices risen since the base year?
5. You discover that for a particular country, the price index increased from 212 to 218 between on year and the next. How much has the price level risen since the “base year”? What is the annual rate of inflation?
Section 9.2 – How Changes in the Cost of Living are Measured
6. What is the consumer price index (CPI)?
7. Discuss how measuring inflation can be misleading given the substitution bias and quality/new goods bias. How has the Bureau of Labor Statistics attempted to address it as of late?
8. List in order of biggest to smallest the eight major categories of the CPI (Figure 9.2).
9. How is core inflation index different from regular CPI?
10. Describe the other types of price indices
a. Producer Price Index (PPI)
b. International Price Index
c. Employment Cost Index
d. GDP deflator
Section 9.3 – How the US and Other Countries Experience Inflation
11. Assess the trends in the US price level and inflation rates over the last 100 years, as well as over the last 30 years (Figure 9.3).
12. Define deflation, and identify two areas in US economic history where it occurred.
13. Define hyperinflation and identify some examples of this through history.
Section 9.4– What Causes Changes in Unemployment over the Long Run
14. Describe how high rates of inflation impacts the following groups :
a. Between those who save and lend money and those that borrow money
b. Employers and employees?
c. Retirees living on a fixed income?
15. Describe the trend in the minimum wage over the last 50 years (Figure 9.6).
16. How can high rates of inflation “blur” price signals for both buyers and sellers in an economy?
17. How can inflation make long-term planning more difficult for both workers/households and firms?
18. Why are low rates of inflation preferred to deflation?
19. How can inflation “oil the gears" or make the labor market for flexible?
Section 9.5– Indexing and its Limitations
20. What does it mean for price, wages, or interest rates to be “indexed”?
21. Describe “cost-of-living-adjustment ...
1
Macroeconomics Tutorial Map (provisional)
Topics Lecture (date)
■ Introduction; Scarcity and choice, market system,
positive and normative, alternative systems
1: F (9/01)
■ Introduction: the PPC, benefits of trade
■ Introduction; Four key macroeconomic variables;
definitions; policy goals;
2: F 9/08
■ The circular flow of income; injections and
withdrawals
■ Measuring National Income 3: F 9/15
■The limits of growth, resource constraints
■ The business cycle 4: F 9/22
■ Introduction to Demand and Supply
■ First In-class TEST Receive 1st take-home
assignment
■Unemployment – measures causes and types 5: F 9/29
■ Unemployment II – measures causes and types
28
Macroeconomics Tutorial Map (provisional)
Topics Lecture (date)
■ Aggregate Demand and Aggregate Supply II –
what drives National Income?
6: F 10/06
■ Aggregate Demand, Supply and Inflation I
■ Aggregate Demand, Supply and Inflation II 7: F 10/13
■ Inflation – more on inflation
■ Fiscal Policy 8: F 10/20
■ Fiscal Policy
■ Second In-Class Test Receive 2nd take-home
assignment
■ The importance of money. Monetary Policy 9: F 10/27
■ The banking system and interest rates
■ More on monetary policy 10: F 11/03
■ NO CLASS F 11/10
■ Supply-side policy I
■ More on supply side, and productivity II
■ Key Supply-side policy choices
11: F 11/17
29
2nd
Assignment
Due
1st As’mt
Due
Macroeconomics Tutorial Map (provisional)
Topics Lecture (date)
■ NO CLASS 11/24
■ Third In-class TEST Receive 3rd take-home
assignment
13: F 12/01
■ International Trade - Reasons for Trade
■ Evaluating Trade and Trade Policy
■ Balance of Payments
■ Exchange rates
■ Exchange rates and macroeconomic policy
■ Examining policy choices
14: F 12/08
■ FINAL EXAM 9:30AM F 12/15
30
■ Tutorial map
l I reserve the right to change this schedule at any time. I will
need to get used to the pace of the class. I may include or
exclude topics depending upon how we are progressing
l IN THE EVENT OF A CONFLICT BETWEEN THE SCHEDULE
HERE AND THE SYLLABUS, THE MOST RECENT SLIDE PACK
TAKES PRECEDENT
3rd Assignment
Due
Macroeconomics
LECTURES 3 & 4
2
Macroeconomics
■ Last time
l The role of government in managing the economy and
alternative economic systems
l Introduction to the 4 key economic variables
l The Economic Cycle and Circular Flow of Income
l Injections and withdrawals
l An overview of the relationship between the four key
Macroeconomic objectives
l Measuring National Income – real vs. nominal
■ Today – National Income Accounts
l Why growth?
l Measuring National Income
l The limits of growth, resource constraints
l The business cycle
165
Macroeconomics
Assignment:
Read McC & B Ch 7 for National Income Accounting
(read all of the chapter now if you like. We will deal
with the shortcomings of GDP as a measure next time)
165
ANY QUESTIONS ON THE
READING OR THE SLIDES FROM
LAST LESSON?
Macroeconomics
■ The first of the four key economic goals: Economic growth
l Usual ...
AS Macro Economics: Economic Cycle and Objectivestutor2u
In this session we are going to focus on the performance of
the UK economy over recent years and see how economic
growth appears to follow a cyclical pattern
Economic Growth in Middle-Income Countries - World Development Report 2024Christina Parmionova
The World Bank’s 2024 World Development Report will explore the challenges of economic growth in middle-income countries. Under the World Bank’s income classifications, the world currently comprises 28 low-income, 108 middle-income, and 81 high-income economies. Constituting about 75% of the world’s population, middle-income countries today account for about 40 percent of global economic activity, 50 % of the world’s extremely poor people, and 60 % of global carbon dioxide emissions. Between 1990 and 2019, 31 middle-income countries transitioned to high-income status. Ten of them—including Hungary and Poland—benefited by joining the European Union (whose economic model is characterized by vigorous trade and capital flows, freer enterprise, and social inclusion) during a period of healthy growth in Europe’s advanced economies. Others such as Kuwait and Saudi Arabia had the good fortune of being endowed with natural resources and timing policy reforms to coincide with high commodity prices. The rest—mostly East Asian economies such as South Korea and Taiwan, China— became high-income countries by making early land reforms and investments in education, postponing immediate gratification by saving a lot and keeping imports artificially expensive, and opening up progressively to trade and investment relations with advanced economies.
http://pwc.to/1lN91cC
Comme tous les mois, l’équipe d’économistes de PwC publie une note sur la situation macro-économique mondiale. Ce mois-ci, focus sur l’accroissement des inégalités dans les pays matures ; les incertitudes concernant la croissance chinoise ; et les prévisions de croissance pour la Grande-Bretagne.
GraphRAG is All You need? LLM & Knowledge GraphGuy Korland
Guy Korland, CEO and Co-founder of FalkorDB, will review two articles on the integration of language models with knowledge graphs.
1. Unifying Large Language Models and Knowledge Graphs: A Roadmap.
https://arxiv.org/abs/2306.08302
2. Microsoft Research's GraphRAG paper and a review paper on various uses of knowledge graphs:
https://www.microsoft.com/en-us/research/blog/graphrag-unlocking-llm-discovery-on-narrative-private-data/
Climate Impact of Software Testing at Nordic Testing DaysKari Kakkonen
My slides at Nordic Testing Days 6.6.2024
Climate impact / sustainability of software testing discussed on the talk. ICT and testing must carry their part of global responsibility to help with the climat warming. We can minimize the carbon footprint but we can also have a carbon handprint, a positive impact on the climate. Quality characteristics can be added with sustainability, and then measured continuously. Test environments can be used less, and in smaller scale and on demand. Test techniques can be used in optimizing or minimizing number of tests. Test automation can be used to speed up testing.
Elevating Tactical DDD Patterns Through Object CalisthenicsDorra BARTAGUIZ
After immersing yourself in the blue book and its red counterpart, attending DDD-focused conferences, and applying tactical patterns, you're left with a crucial question: How do I ensure my design is effective? Tactical patterns within Domain-Driven Design (DDD) serve as guiding principles for creating clear and manageable domain models. However, achieving success with these patterns requires additional guidance. Interestingly, we've observed that a set of constraints initially designed for training purposes remarkably aligns with effective pattern implementation, offering a more ‘mechanical’ approach. Let's explore together how Object Calisthenics can elevate the design of your tactical DDD patterns, offering concrete help for those venturing into DDD for the first time!
Essentials of Automations: The Art of Triggers and Actions in FMESafe Software
In this second installment of our Essentials of Automations webinar series, we’ll explore the landscape of triggers and actions, guiding you through the nuances of authoring and adapting workspaces for seamless automations. Gain an understanding of the full spectrum of triggers and actions available in FME, empowering you to enhance your workspaces for efficient automation.
We’ll kick things off by showcasing the most commonly used event-based triggers, introducing you to various automation workflows like manual triggers, schedules, directory watchers, and more. Plus, see how these elements play out in real scenarios.
Whether you’re tweaking your current setup or building from the ground up, this session will arm you with the tools and insights needed to transform your FME usage into a powerhouse of productivity. Join us to discover effective strategies that simplify complex processes, enhancing your productivity and transforming your data management practices with FME. Let’s turn complexity into clarity and make your workspaces work wonders!
Removing Uninteresting Bytes in Software FuzzingAftab Hussain
Imagine a world where software fuzzing, the process of mutating bytes in test seeds to uncover hidden and erroneous program behaviors, becomes faster and more effective. A lot depends on the initial seeds, which can significantly dictate the trajectory of a fuzzing campaign, particularly in terms of how long it takes to uncover interesting behaviour in your code. We introduce DIAR, a technique designed to speedup fuzzing campaigns by pinpointing and eliminating those uninteresting bytes in the seeds. Picture this: instead of wasting valuable resources on meaningless mutations in large, bloated seeds, DIAR removes the unnecessary bytes, streamlining the entire process.
In this work, we equipped AFL, a popular fuzzer, with DIAR and examined two critical Linux libraries -- Libxml's xmllint, a tool for parsing xml documents, and Binutil's readelf, an essential debugging and security analysis command-line tool used to display detailed information about ELF (Executable and Linkable Format). Our preliminary results show that AFL+DIAR does not only discover new paths more quickly but also achieves higher coverage overall. This work thus showcases how starting with lean and optimized seeds can lead to faster, more comprehensive fuzzing campaigns -- and DIAR helps you find such seeds.
- These are slides of the talk given at IEEE International Conference on Software Testing Verification and Validation Workshop, ICSTW 2022.
Why You Should Replace Windows 11 with Nitrux Linux 3.5.0 for enhanced perfor...SOFTTECHHUB
The choice of an operating system plays a pivotal role in shaping our computing experience. For decades, Microsoft's Windows has dominated the market, offering a familiar and widely adopted platform for personal and professional use. However, as technological advancements continue to push the boundaries of innovation, alternative operating systems have emerged, challenging the status quo and offering users a fresh perspective on computing.
One such alternative that has garnered significant attention and acclaim is Nitrux Linux 3.5.0, a sleek, powerful, and user-friendly Linux distribution that promises to redefine the way we interact with our devices. With its focus on performance, security, and customization, Nitrux Linux presents a compelling case for those seeking to break free from the constraints of proprietary software and embrace the freedom and flexibility of open-source computing.
SAP Sapphire 2024 - ASUG301 building better apps with SAP Fiori.pdfPeter Spielvogel
Building better applications for business users with SAP Fiori.
• What is SAP Fiori and why it matters to you
• How a better user experience drives measurable business benefits
• How to get started with SAP Fiori today
• How SAP Fiori elements accelerates application development
• How SAP Build Code includes SAP Fiori tools and other generative artificial intelligence capabilities
• How SAP Fiori paves the way for using AI in SAP apps
Alt. GDG Cloud Southlake #33: Boule & Rebala: Effective AppSec in SDLC using ...James Anderson
Effective Application Security in Software Delivery lifecycle using Deployment Firewall and DBOM
The modern software delivery process (or the CI/CD process) includes many tools, distributed teams, open-source code, and cloud platforms. Constant focus on speed to release software to market, along with the traditional slow and manual security checks has caused gaps in continuous security as an important piece in the software supply chain. Today organizations feel more susceptible to external and internal cyber threats due to the vast attack surface in their applications supply chain and the lack of end-to-end governance and risk management.
The software team must secure its software delivery process to avoid vulnerability and security breaches. This needs to be achieved with existing tool chains and without extensive rework of the delivery processes. This talk will present strategies and techniques for providing visibility into the true risk of the existing vulnerabilities, preventing the introduction of security issues in the software, resolving vulnerabilities in production environments quickly, and capturing the deployment bill of materials (DBOM).
Speakers:
Bob Boule
Robert Boule is a technology enthusiast with PASSION for technology and making things work along with a knack for helping others understand how things work. He comes with around 20 years of solution engineering experience in application security, software continuous delivery, and SaaS platforms. He is known for his dynamic presentations in CI/CD and application security integrated in software delivery lifecycle.
Gopinath Rebala
Gopinath Rebala is the CTO of OpsMx, where he has overall responsibility for the machine learning and data processing architectures for Secure Software Delivery. Gopi also has a strong connection with our customers, leading design and architecture for strategic implementations. Gopi is a frequent speaker and well-known leader in continuous delivery and integrating security into software delivery.
LF Energy Webinar: Electrical Grid Modelling and Simulation Through PowSyBl -...DanBrown980551
Do you want to learn how to model and simulate an electrical network from scratch in under an hour?
Then welcome to this PowSyBl workshop, hosted by Rte, the French Transmission System Operator (TSO)!
During the webinar, you will discover the PowSyBl ecosystem as well as handle and study an electrical network through an interactive Python notebook.
PowSyBl is an open source project hosted by LF Energy, which offers a comprehensive set of features for electrical grid modelling and simulation. Among other advanced features, PowSyBl provides:
- A fully editable and extendable library for grid component modelling;
- Visualization tools to display your network;
- Grid simulation tools, such as power flows, security analyses (with or without remedial actions) and sensitivity analyses;
The framework is mostly written in Java, with a Python binding so that Python developers can access PowSyBl functionalities as well.
What you will learn during the webinar:
- For beginners: discover PowSyBl's functionalities through a quick general presentation and the notebook, without needing any expert coding skills;
- For advanced developers: master the skills to efficiently apply PowSyBl functionalities to your real-world scenarios.
Epistemic Interaction - tuning interfaces to provide information for AI supportAlan Dix
Paper presented at SYNERGY workshop at AVI 2024, Genoa, Italy. 3rd June 2024
https://alandix.com/academic/papers/synergy2024-epistemic/
As machine learning integrates deeper into human-computer interactions, the concept of epistemic interaction emerges, aiming to refine these interactions to enhance system adaptability. This approach encourages minor, intentional adjustments in user behaviour to enrich the data available for system learning. This paper introduces epistemic interaction within the context of human-system communication, illustrating how deliberate interaction design can improve system understanding and adaptation. Through concrete examples, we demonstrate the potential of epistemic interaction to significantly advance human-computer interaction by leveraging intuitive human communication strategies to inform system design and functionality, offering a novel pathway for enriching user-system engagements.
Transcript: Selling digital books in 2024: Insights from industry leaders - T...BookNet Canada
The publishing industry has been selling digital audiobooks and ebooks for over a decade and has found its groove. What’s changed? What has stayed the same? Where do we go from here? Join a group of leading sales peers from across the industry for a conversation about the lessons learned since the popularization of digital books, best practices, digital book supply chain management, and more.
Link to video recording: https://bnctechforum.ca/sessions/selling-digital-books-in-2024-insights-from-industry-leaders/
Presented by BookNet Canada on May 28, 2024, with support from the Department of Canadian Heritage.
Transcript: Selling digital books in 2024: Insights from industry leaders - T...
Macro 6 voice07
1. 6 CHAPTER Long-Run Economic Growth: Sources and Policies Google’s problems highlight one of the paradoxes of China in recent years: very rapid economic growth occurring in the context of government regulations that may ultimately stifle that growth.
2. Economic Growth over Time and around the World 10.1 LEARNING OBJECTIVE Define economic growth, calculate economic growth rates, and describe global trends in economic growth. Economic Growth from 1,000,000 B.C. to the Present Industrial Revolution The application of mechanical power to the production of goods, beginning in England around 1750.
3. 10.1 LEARNING OBJECTIVE MakingtheConnection YOUR TURN:Test your understanding by doing related problem 1.3 at the end of this chapter. Define economic growth, calculate economic growth rates, and describe global trends in economic growth. Why Did the IndustrialRevolution Begin in England? Most economists accept the idea that economic growth is not likely to occur unless a country’s government provides the necessary type of institutional framework. The British government’s guarantee of property rights set the stage for the Industrial Revolution.
4. Economic Growth over Time and around the World 10.1 LEARNING OBJECTIVE Define economic growth, calculate economic growth rates, and describe global trends in economic growth. Economic Growth from 1,000,000 B.C. to the Present FIGURE 10-1 Average Annual Growth Rates for the World Economy World economic growth was essentially zero in the years before 1300, and it was very slow—an average of only 0.2 percent per year—before 1800. The Industrial Revolution made possible the sustained increases in real GDP per capita that have allowed some countries to attain high standards of living.
5. Economic Growth over Time and around the World 10.1 LEARNING OBJECTIVE YOUR TURN:Test your understanding by doing related problem 1.6 at the end of this chapter. Define economic growth, calculate economic growth rates, and describe global trends in economic growth. Small Differences in Growth Rates Are Important In the long run, small differences in economic growth rates result in big differences in living standards. Why Do Growth Rates Matter? Growth rates matter because an economy that grows too slowly fails to raise living standards. Don’t Let This Happen to YOU!Don’t Confuse the Average Annual Percentage Change with the Total Percentage Change
6. 10.1 LEARNING OBJECTIVE MakingtheConnection YOUR TURN:Test your understanding by doing related problem 1.7 at the end of this chapter. Define economic growth, calculate economic growth rates, and describe global trends in economic growth. The Benefits of an EarlierStart: Standards of Livingin China and Japan Although China has experienced rapid economic growth, its living standards are still well below those of Japan.
7. Economic Growth over Time and around the World 10.1 LEARNING OBJECTIVE Define economic growth, calculate economic growth rates, and describe global trends in economic growth. “The Rich Get Richer and . . . ” FIGURE 10-2 GDP per Capita, 2008 GDP per capita is measured in U.S. dollars, corrected for differences across countries in the cost of living.
8. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. Economic growthmodel A model that explains growth rates in real GDP per capita over the long run. Labor productivity The quantity of goods and services that can be produced by one worker or by one hour of work. Technological change A change in the quantity of output a firm can produce using a given quantity of inputs.
9. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. There are three main sources of technological change: • Better machinery and equipment. • Increases in human capital. Human capital The accumulated knowledge and skills that workers acquire from education and training or from their life experiences. • Better means of organizing and managing production.
10. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. The Per-Worker Production Function Per-worker production function The relationship between real GDP per hour worked and capital per hour worked, holding the level of technology constant.
11. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. The Per-Worker Production Function FIGURE 10-3 The Per-Worker Production Function The per-worker production function shows the relationship between capital per hour worked and real GDP per hour worked, holding technology constant. Increases in capital per hour worked increase output per hour worked but at a diminishing rate. For example, an increase in capital per hour worked from $20,000 to $30,000 increases real GDP per hour worked from $200 to $350. An increase in capital per hour worked from $30,000 to $40,000 increases real GDP per hour worked only from $350 to $475. Each additional $10,000 increase in capital per hour worked results in a progressively smaller increase in output per hour worked.
12. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. Which Is More Important for Economic Growth: More Capital or Technological Change? Technological change helps economies avoid diminishing returns to capital.
13. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. Technological Change: The Key to Sustaining Economic Growth FIGURE 10-4 Technological Change Increases Output per Hour Worked Technological change shifts up the production function and allows more output per hour worked with the same amount of capital per hour worked. For example, along Production function1 with $50,000 in capital per hour worked, the economy can produce $575 in real GDP per hour worked. However, an increase in technology that shifts the economy to Production function2 makes it possible to produce $675 in real GDP per hour worked with the same level of capital per hour worked.
14. 10.2 LEARNING OBJECTIVE MakingtheConnection YOUR TURN:Test your understanding by doing related problem 2.10 at the end of this chapter. Use the economic growth model to explain why growth rates differ across countries. What Explains the Economic Failure of the Soviet Union? A centrally planned economy, such as the Soviet Union’s, could not, over the long run, grow faster than a market economy. The Soviet Union collapsed in 1991, and contemporary Russia now has a more market-oriented system, although the government continues to play a much larger role in the economy than does the government in the United States. The fall of the Berlin Wall in 1989 symbolized the failure of Communism.
15. 10.2 LEARNING OBJECTIVE 10-2 Solved Problem Use the economic growth model to explain why growth rates differ across countries. Using the Economic Growth Model to Analyze the Failure of the Soviet Union’s Economy YOUR TURN:For more practice, do related problems 2.7 and 2.8 at the end of this chapter.
16. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. New Growth Theory New growth theory A model of long-run economic growth that emphasizes that technological change is influenced by economic incentives and so is determined by the working of the market system.
17. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. New Growth Theory Government policy can help increase the accumulation of knowledge capital in three ways: • Protecting intellectual property with patents and copyrights. Patent The exclusive right to produce a product for a period of 20 years from the date the product is invented. • Subsidizing research and development. • Subsidizing education.
18. What Determines How Fast Economies Grow? 10.2 LEARNING OBJECTIVE Use the economic growth model to explain why growth rates differ across countries. Joseph Schumpeter and Creative Destruction Schumpeter developed a model of growth that emphasized his view that new products unleash a “gale of creative destruction” that drives older products—and, often, the firms that produced them—out of the market.
19. Economic Growth in the United States 10.3 LEARNING OBJECTIVE Discuss fluctuations in productivity growth in the United States. Economic Growth in the United States since 1950 FIGURE 10-5 Average Annual Growth Rates in Real GDP per Hour Worked in the United States The growth rate in the United States increased from 1800 through the mid-1970s. Then, for more than 20 years, growth slowed before increasing again in the mid-1990s.
20. Economic Growth in the United States 10.3 LEARNING OBJECTIVE Discuss fluctuations in productivity growth in the United States. Economic Growth in the United States since 1950 What Caused the Productivity Slowdown of 1973–1994? • Measurement problems • High oil prices • Deterioration in the U.S. educational system Has the “New Economy” Increased Productivity? Productivity growth in the United States increased between 1995 and 2008 compared to the previous 20-year period. Some economists argue that the development of a “new economy” based on information technology caused the higher productivity growth that began in the mid-1990s.
21. Economic Growth in the United States 10.3 LEARNING OBJECTIVE Discuss fluctuations in productivity growth in the United States. Productivity Growth in theHigh-Income Economies, 1995-2008 FIGURE 10-6 Productivity Growth in the Leading Industrial Economies, 1996–2008 Productivity growth as measured by the average annual growth rate of labor productivity was more rapid in the United States than in the other high-income countries during the years between 1995 and 2008.
22. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Catch-up The prediction that the level of GDP per capita (or income per capita) in poor countries will grow faster than in rich countries.
23. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Catch-up: Sometimes, but Not Always FIGURE 10-7 The Catch-up Predicted by the Economic Growth Model According to the economic growth model, countries that start with lower levels of real GDP per capita should grow faster (points near the top of the line) than countries that start with higher levels of real GDP per capita (points near the bottom of the line).
24. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Catch-up: Sometimes, but Not Always Catch-up among High-Income Countries FIGURE 10-8 There Has Been Catch-up among High-income Countries Looking only at countries that currently have high incomes, countries such as Ireland and Japan that had the lowest incomes in 1960 grew the fastest between 1960 and 2008.Countries such as Switzerland and the United States that had the highest incomes in 1960 grew the slowest.
25. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Catch-up: Sometimes, but Not Always Are the Developing Countries Catching Up to theHigh-income Countries? FIGURE 10-9 Most of the World Hasn’t Been Catching Up Looking at all countries for which statistics are available does not show the catch-up predicted by the economic growth model. Some countries that had low levels of real GDP per capita in 1960, such as Niger, Madagascar, and the Democratic Republic of the Congo, actually experienced negative economic growth. Other countries that started with low levels of real GDP per capita, such as Malaysia and South Korea, grew rapidly. Some middle-income countries in 1960, such as Venezuela, hardly grew between 1960 and 2008, while others, such as Israel, experienced significant growth.
26. 10.4 LEARNING OBJECTIVE 10-4 Solved Problem YOUR TURN:For more practice, do related problems 4.4 and 4.5 at the end of this chapter. Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. The Economic Growth Model’s Prediction of Catch-up
27. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Why Don’t More Low-Income Countries Experience Rapid Growth? Failure to Enforce the Rule of Law Property rights The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it. Rule of law The ability of a government to enforce the laws of the country, particularly with respect to protecting private property and enforcing contracts.
28. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Why Don’t More Low-Income Countries Experience Rapid Growth? Wars and Revolutions Wars have made it impossible for countries such as Afghanistan, Angola, Ethiopia, the Central African Republic and the Congo to accumulate capital or adopt new technologies.
29. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. Why Don’t More Low-Income Countries Experience Rapid Growth? Poor Public Education and Health Many low-income countries have weak public school systems, so many workers are unable to read and write. People who are sick work less and are less productive when they do work. Low Rates of Saving and Investment The low savings rates in developing countries can contribute to a vicious cycle of poverty.
30. 10.4 LEARNING OBJECTIVE MakingtheConnection YOUR TURN:Test your understanding by doing related problem 4.7 at the end of this chapter. Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. What Do Parking Tickets in New York City Have to Do WithPoverty in the Developing World?
31. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. The Benefits of Globalization Foreign direct investment (FDI)The purchase or building by a corporation of a facility in a foreign country. Foreign portfolio investmentThe purchase by an individual or a firm of stock or bonds issued in another country. Globalization The process of countries becoming more open to foreign trade and investment.
32. Why Isn’t the Whole World Rich? 10.4 LEARNING OBJECTIVE Explain economic catch-up and discuss why many poor countries have not experienced rapid economic growth. The Benefits of Globalization FIGURE 10-10 Globalization and Growth Developing countries that were more open to foreign trade and investment grew much faster during the 1990s than developing countries that were less open.
37. AN INSIDE LOOK >> Investment Spurs China’s Growth China Officials: Long Live Investment Continuous increases in capital per hour worked lead to smaller and smaller increases in output per hour worked.
38. KEY TERMS Catch-up Economic growth model Foreign direct investment (FDI) Foreign portfolio investment Globalization Human capital Industrial Revolution Labor productivity New growth theory Patent Per-worker production function Property rights Rule of law Technological change