On a difference equation occurring in growth economics
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On a difference equation occurring in growth economics by Leif Johansen

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Published in [Oslo] .
Written in English

Subjects:

  • Difference equations

Book details:

Edition Notes

SeriesMemorandum from Institute of Economics, University of Oslo, Memorandum fra Sosialøkonomisk institutt, Universitetet i Oslo
ContributionsLindholt, Tore,
Classifications
LC ClassificationsQA431 J6
The Physical Object
Pagination[7 leaves]
ID Numbers
Open LibraryOL18449502M

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economic growth only in the short run. An increase in the saving rate raises growth until the economy reaches the new steady state. That is, if the economy maintains a high saving rate, it will also maintain a large capital stock and a high level of output, but it will not maintain a high rate of growth forever. Size: 98KB. The Facts of Economic Growth C.I. Jones Stanford GSB, Stanford, CA, United States NBER, Cambridge, MA, United States Contents 1. Growth at the Frontier 5 Modern Economic Growth 5 Growth Over the Very Long Run 7 2. Sources of Frontier Growth 9 Growth Accounting 9 Physical Capital 11 Factor Shares 14 Human Capital 15 Economic growth is defined as the increase in the market value of the goods and services produced by an economy over time. It is measured as the percentage rate of increase in the real gross domestic product (GDP). To determine economic growth, the GDP is compared to the population, also know as the per capita income. For economic growth to translate into a higher standard of living on average, economic growth must exceed population growth. From to , for example, Sierra Leone’s population grew at an annual rate of % per year, while its real GDP grew at an annual rate of %; its output per capita thus fell at a rate of % per year.

This equation follows from the quantity one in the preceding section. It says that the growth rate of the money supply (g m) is equal to the rate of inflation (π) plus the growth rate of real GDP (g y); g y is unaffected by monetary policy in the long run, so increasing the growth of the money supply leads to a one-for-one increase in.   Higher savings can fund more investment, helping economic growth. Economic growth without development. It is possible to have economic growth without development. i.e. an increase in GDP, but most people don’t see any actual improvements in living standards. This could occur due to: Economic growth may only benefit a small % of the population. A. Actual Growth Rate (G): In the Harrodian model the first fundamental equation is: GC = s (1) Where G is the rate of growth of output in a given period of time and can be expressed as ∆Y/Y; C is the net addition to capital and is defined as the ratio of investment to the increase in income, i.e. Created Date: 2/16/ PM.

understanding of phenomena such as economic growth, cycles, and market analysis, in order to anticipate and control their behavior. For example, the logistic population growth model! N ˙ (t)=aN(t)(1"bN(t)) accounts for resource effects on population growth N(t). Economic Growth and Development 2 yDefine clearly the concept of economic growth and development (Economic growth can simply be defined as a rise in GDP or GDP per capital. Economic development is a broad concept encompassing economic growth and other developmental dimensions. It can be defined as “a. Introduction Definitions and Basics Economic Growth, at Economic growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. It can be measured in nominal or real terms, the latter of which is adjusted for inflation. Traditionally, aggregate economic growth is measured [ ]. Solow’s economic growth model is a great example of how we can use di erential equations in real life. The model can be modi ed to include various inputs including growth in the labor force and technological improvements. The key to short-run growth is increased investments, while technology and e ciency improve long-run growth.