ECON 2513 Chapter Notes - Chapter 6: Free Trade, Capital Accumulation, Factors Of Production
17 Oct 2018
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Document Summary
Readings- the golden age of economic growth in western europe 1950- 1973. Post ww2 golden age unusually rapid growth in which western europe (and japan) could be seen to be catching up to leading economy (the us). Catch up went along with general reduction in dispersion of income levels within oecd. Three elements required for rapid growth (and the catching up) large technological gaps, enlarged social competence and conditions favouring rapid realization of potential. New growth economics the solow model. Five central features- role of investment, human capital, the effects of policy on growth, catch-up and convergence, and social capability. Based on assumption capital accumulation is subject to diminishing returns such that in the long run the rate of growth is independent of the rate of investment and thus of policies which influence investment. Long run growth of income per person requires exogenous improvements in technology generate productivity growth- reflected in growth accounts residual.
