EC140 Lecture Notes - Lecture 13: Kuznets Curve, Diminishing Returns, Balanced-Growth Equilibrium
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EC140 Full Course Notes
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Chapter 25 - key learning objectives: discuss the costs and benefits of economic growth, list four determinants of economic growth, understand the key concepts of neoclassical growth theory. 5 understand why environmental challenges may create challenges for public policies directed at sustaining economic growth. Growth in the labour force: growth in population, or labour force participation rate. Growth in human capital: quality of the labour force, could be part of capital or productivity - depends on the measurement. Growth in physical capital: investments affect quantity and quality of physical capital. Technological improvement: new products (goods and services), new production methods, improvements in organizing economic activity. Labour-force growth: increases in real gdp, decreases in real gdp per capita. Capital accumulation: increases in real gdp and real gdp per capita, due to diminishing marginal returns, these increases become smaller as you increase capital.
