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MACROECONOMICS-CH8
- 1. CHAPTER EIGHT Economic Growth II
- 9. Tech. progress in the Solow model k = s f ( k ) ( + n + g ) k Investment, break-even investment Capital per worker, k sf(k) ( + n + g ) k k *
- 10. Steady-State Growth Rates in the Solow Model with Tech. Progress n + g Y = y E L Total output g ( Y / L ) = y E Output per worker 0 y = Y / ( L E ) Output per effective worker 0 k = K / ( L E ) Capital per effective worker Steady-state growth rate Symbol Variable
- 11. The Golden Rule To find the Golden Rule capital stock, express c * in terms of k * : c * = y * i * = f ( k * ) ( + n + g ) k * c * is maximized when MPK = + n + g or equivalently, MPK = n + g In the Golden Rule Steady State, the marginal product of capital net of depreciation equals the pop. growth rate plus the rate of tech progress.
- 23. CASE STUDY: The Productivity Slowdown 1972-95 1948-72 1.5 1.8 2.6 2.3 2.0 1.6 1.8 2.2 2.4 8.2 4.9 5.7 4.3 2.9 U.S. U.K. Japan Italy Germany France Canada Growth in output per person (percent per year)
- 27. CASE STUDY: I.T. and the “new economy” 1995-2000 1972-95 1948-72 2.9 2.5 1.1 4.7 1.7 2.2 2.7 1.5 1.8 2.6 2.3 2.0 1.6 1.8 2.2 2.4 8.2 4.9 5.7 4.3 2.9 U.S. U.K. Japan Italy Germany France Canada Growth in output per person (percent per year)
Hinweis der Redaktion
- Chapter 7 had a single focus: the in-depth development of the Solow model. In contrast, Chapter 8 is a survey of many growth topics. First, the Solow model is extended to incorporate labor-augmenting technological progress at an exogenous rate. Then, policy implications are discussed. There’s a nice case study on the productivity slowdown (pp.216-217) and another on the “new economy” (pp.218-219). These are followed by a discussion of growth empirics, including balanced growth, convergence, and growth from factor accumulation vs. increases in efficiency. Finally, the chapter presents two very simple endogenous growth models. The models presented in this chapter are presented very concisely . If you want your students to master these models, you will need to have them do exercises and policy analysis with the models. The chapter includes some excellent Problems and Applications for this, which you can assign as homework or use in class to break up your lecture. If you are pressed for time and are considering skipping this chapter, I encourage you to consider at least covering sections 8-1 and 8-2. Section 8-1 completes the presentation of the Solow model begun in Chap. 7. One class period should be enough time to cover it, allowing for one or two in-class exercises if you wish. Section 8-2 discusses policy implications; it is not difficult or time-consuming, yet students find it very interesting - it helps give additional real-world relevance to the material in Chap 7 and in Section 8-1.