Why are national growth rates so similar? Why do some countries experience spectacular levels of growth? 1/3
Growth rates across the world 65-95:
- “spectacular”: China (8.2% 80-95)
- “very good”: East Asia (5.5% 65-90)
- “decent”: South East Asia
- “bad”: Latin America
- “very bad”: Sub-Saharan Africa
Why are national growth rates so similar? Why do some countries experience spectacular levels of growth? 2/3
Making sense of growth figures:
- small numbers go a long way: the number of years necessary to double income is equal to 70/growth rate
- if the economy is growing at 5% per year, it will
- take 14 years to double in size
- if the economy is growing at 1% per year, it will
- take 70 years to double in size
Why are national growth rates so similar? Why do some countries experience spectacular levels of growth? 3/3
USA, UK and EIRE
China and India
Brazil, S. Korea, Philippines
Economic growth determinants: stylised facts
1.Output per capital and capital intensity keep increasing Labour (L) measured in man-hours grows more slowly than capital (K) and output (Y)
This means that (K/L)↑ and (Y/L)↑Capital
2. Output ratio is trendless
3. Hourly wages keep increasing
4. The rate of profit is trendless
5. The relative share of GDP going to L and K is trendless
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