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Week 10: The economy in the long- run: an introduction to economic growth
Week 10: The economy in the long- run: an introduction to economic growth
Facts
Real GDP/ person
is a key measure of a country's living standards and stage of economic development
Economic growth
growth miracles (open up - exports)
growth disasters
Economic growth and potential outputs
Target in the long- run: closing the output gaps
Factors effecting the growth rate
Technology
Demographic factors
Labor market efficient
Resources (labor, capital, natural resources)
Political stability
Determinants of average labor productivity
Land and other natural resources
Technology
Physical capital (diminishing marginal productivity)
Entrepreneurs and management
Human capital (training, skills)
Political and legal environment
Costs of economic growth
Sacrifice of consumption for capital formation
Working for longer hours (in unsafe conditions)
Promoting economic growth
Policies that promote savings and investment
Policies that support research and development
Policies to increase human capital
The legal and political framework