[初中教育]Chapter Three.ppt

Quantity and Quality The practical question then for our consideration is,what are the most immediate and effectivestimulants for the creation and progress of wealth. THOMAS MALTHUS Why did development economics fade away? … theleading development economists failed to turn theirintuitive insights into clear-cut models that could serve as the core of an enduring discipline. PAUL KRUGMAN Quantity and Quality Saving behaviour Efficiency Quantity and Quality Two main theories of economic growth the new theory of endogenous growth the neoclassical theory of exogenous growth Endogenous growth:Determination of economic growth and technological progress Experiment 1: The saving rate Experiment 2: Efficiency Endogenous growth accounting Endogenous growth accounting Endogenous growth accounting An increase in the saving rate increases output per head An increase in static efficiency increases output per head Increased depreciation reduces output per head Increased population growth reduces output per head An increase in dynamic efficiency increases output per head Questions for review 1. Does the rate of growth of output per head depend on population growth? Does the answer to this question depend on whether economic growth is exogenous or endogenous? How? Illustrate your answers with diagrams. Does your analysis imply that countries with small populations ultimately become more - or less? - affluent per capita than large (i.e. populous) countries? 2. Consider a country that is exposed to an adverse external shock - a lasting decline in the price of its main exports, for example. This shock lowers the standard of living, and people decide to consume more and save less out of current income, other things being equal. If this change is permanent, how would you expect it to influence I. the rate of growth of output per capita in the long run and II. the level of income per capita in the long run? Questions for review 3. Consider a country whose capital stock