文档介绍：User JOEWA:Job EFF01423:6264_ch07:Pg 178:25956#/eps at 100% *25956* Wed, Feb 13, 2002 9:48 AM
part III
Growth Theory:
The Economy in
the Very Long Run
User JOEWA:Job EFF01423:6264_ch07:Pg 179:26796#/eps at 100% *26796* Wed, Feb 13, 2002 9:48 AM
CHAPTER SEVEN
Economic7 Growth I
The question of growth is nothing new but a new disguise for an age-old
issue, one which has always intrigued and upied economics: the
present versus the future.
— James Tobin
If you have ever spoken with your grandparents about what their lives were
like when they were young, most likely you learned an important lesson
about economics: material standards of living have improved substantially over
time for most families in most es from rising in-
comes, which have allowed people to consume greater quantities of goods and
services.
To measure economic growth, economists use data on gross domestic prod-
uct, which measures the total e of everyone in the economy. The real
GDP of the United States today is more than three times its 1950 level, and real
GDP per person is more than twice its 1950 level. In any given year, we can also
observe large differences in the standard of living among countries. Table 7-1
shows e per person in 1999 of the world’s 12 most populous countries.
The United States tops the list with an e of $31,910 per person. Nigeria
has an e per person of only $770—less than 3 percent of the figure for the
United States.
Our goal in this part of the book is to understand what causes these differ-
ences in e over time and across countries. In Chapter 3 we identified the
factors of production—capital and labor—and the production technology as the
sources of the economy’s output and, thus, of its total e. Differences in in-
come, then, e from differences in capital, labor, and technology.
Our primary task is to develop a theory of economic growth called the
Solow growth model. Our analysis in Chapter 3 ena