ECON1020 Lecture 4: Unemployment
Document Summary
Factors for economic growth: economic openness (the more open you are to trade and investment the more economic growth will be; technology; better infrastructure (better airports, clearance of roads, better roads); labour; capital. Blue line - actual gdp --- also known as potential gdp. Red line - trend (average gdp) --- red line growths either because you"re investing in labour, capital, technology, infrastructure, trade openness, etc. -- also known as long-run movements: anything around the red line represents the fluctuation of the gdp --- important --- usually seen as short-run fluctuations. (note: unless stated otherwise, gdp means real gdp. ) In analyzing changes in gdp (or gdp per capita) over time, it is useful to distinguish between short-run and long- run movements. A country"s long-run trend gdp value is called potential gdp. A country"s potential gdp is not its maximum gdp.
