ECSENOMICS Chapter 27 e process of Economic growth McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 27 The Process of Economic Growth
ECSENOMICS Economic Growth Is Key to Long Term Living Standards 1-199 Figure 27-1 Interaction of AS and AD Determinants of potential output Inputs Aggregate Tar and McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. T-199 Figure 27-1 Economic Growth Is Key to LongTerm Living Standards
ECSENOMICS Diffusion of Major Technologies during the Twentieth Century T200 Figure 27-2 100 Televisions Electric powe Hom 0 1920 194 1960 1970 1990 2000 Ye McGraw-Hilllrwin Source: Economic Report of the President, 2000
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Diffusion of Major Technologies during the Twentieth Century T-200 Figure 27-2 Source: Economic Report of the President, 2000
ECSENOMICS The Classical Dynamics of Smith and malthus T201 Figure 27-3 (a)Smiths Golden Age (b) Malthus's Dismal Science 400 E300 e200 e200 L=2 100 200 100125 Food production Food production McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. The Classical Dynamics of Smith and Malthus T-201 Figure 27-3
ECSENOMICS Environmental Constraints Can Be t Overcome with New Technologies T202 Figure 27-4 Period 2 without TC PEriod I Period 2 with TC B Environmental quality McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Environmental Constraints Can Be Overcome with New Technologies T-202 Figure 27-4
ECSENOMICS Economic Growth through Capital Deepening T203 Figure 27-5 APF (Q/L) (Q/Lh 2 K/L (K/L) (K/L\ orker Capital per McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Economic Growth through Capital Deepening T-203 Figure 27-5
ECSENOMICS Technological Advance Shifts Ui the Production Function T204 Figure 27-6 L APF. (Q/L) E200 2 APF 1950 (QL50 E K/L (K/L19s0(K/L2 Capital per worker McGraw-Hilllrwin Copyright C 2001 The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Technological Advance Shifts Up the Production Function T-204 Figure 27-6
ECSENOMICS Economic Growth Displays Striking regularities T205 (a)(trut. I abot, Car tb)Canital(tpul Italia Figure 27-7 3,00 Real domestic 1.50 Careal wock(K WiekwrHeorgmat per utput per McGraw-Hilllrwin Source: U.S. De partments of Commerce and Labor, Fe deral Reserve Board, U.S. Bureau of the Census
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Economic Growth Displays Striking Regularities T-205 Figure 27-7 Source: U.S. Departments of Commerce and Labor, Federal Reserve Board, U.S. Bureau of the Census, and historical studies by John Kendrick
ECSENOMICS Productivity Growth Slowed in t 1970s but Recovered in Late 1990s T206 Figure 27-8 5.0 3,0 1950 1970 2000 McGraw-Hilllrwin Source: U.S. Department of Labor; figures are 5-yearaverages
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. Productivity Growth Slowed in 1970s but Recovered in Late 1990s Source: U.S. Department of Labor; figures are 5-year averages T-206 Figure 27-8
ECSENOMICS The Components of the Productivity Surge in the Late 1990s T207 Figure 27-9 1950-1972 口1972-1995 1995-199 Nonfarm Other durable Nondurable business manufacturing McGraw-Hilllrwin Source: robert gordon and the bureau of labor statistics
McGraw-Hill/Irwin Copyright © 2001 The McGraw-Hill Companies, Inc. All rights reserved. The Components of the Productivity Surge in the Late 1990s Source: Robert J. Gordon and the Bureau of Labor Statistics T-207 Figure 27-9