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    CH6 The Long-Term Economic Growth Economic Growth Real GDP Per Capital Real GDP/ Population

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    JoJo Chan
    Economic growth is measured by the change in real GDP per capita over time and indicates changes in living standards. The key factors that determine long-term economic growth are labor productivity, the average number of working hours, and the employment to population ratio. Labor productivity, which is affected by capital investment, technology progress, education and training programs, has the strongest influence on sustained long-term growth. Government policies can also impact economic growth by influencing these key factors through measures that affect labor and capital markets.

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    CH6 The Long-Term Economic Growth Economic Growth Real GDP Per Capital Real GDP/ Population

    Uploaded by

    JoJo Chan
    3 views1 page
    Economic growth is measured by the change in real GDP per capita over time and indicates changes in living standards. The key factors that determine long-term economic growth are labor productivity, the average number of working hours, and the employment to population ratio. Labor productivity, which is affected by capital investment, technology progress, education and training programs, has the strongest influence on sustained long-term growth. Government policies can also impact economic growth by influencing these key factors through measures that affect labor and capital markets.

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    econ note

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    6

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    Economic growth is measured by the change in real GDP per capita over time and indicates changes in living standards. The key factors that determine long-term economic growth are labor productivity, the average number of working hours, and the employment to population ratio. Labor productivity, which is affected by capital investment, technology progress, education and training programs, has the strongest influence on sustained long-term growth. Government policies can also impact economic growth by influencing these key factors through measures that affect labor and capital markets.

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    © All Rights Reserved
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    3 views1 page

    CH6 The Long-Term Economic Growth Economic Growth Real GDP Per Capital Real GDP/ Population

    Uploaded by

    JoJo Chan
    Economic growth is measured by the change in real GDP per capita over time and indicates changes in living standards. The key factors that determine long-term economic growth are labor productivity, the average number of working hours, and the employment to population ratio. Labor productivity, which is affected by capital investment, technology progress, education and training programs, has the strongest influence on sustained long-term growth. Government policies can also impact economic growth by influencing these key factors through measures that affect labor and capital markets.

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    CH6 The long-term economic growth

    Economic growth= real GDP per capital= real GDP/ population


    Measure living standard

    Real GDP
    Real GDP Real GDP Total working hours Total employment
    ————— =————— X ————— X —————
    Population Total working hours Total employment EPR

    % change in real GDP = % change (Labor productivity + Average working hours


    +employment population to ration)

    Factor:
    1.Average working hours (x determine economic growth as it is stable)
    2.employment population to ration [relate to labor market] (x sustain economic growth, only
    can make economic temporarily growth)
    -population
    3.Labor productivity [relate to loanable market] [long-term economic growth]
    -capital stock [capital per unit of labor] = planned investment (affect total employment
    & capital depreciation)– depreciation of existing capital
    - technology progress [discovery-base growth & catch-up growth]

    Government policy affect


    Supply sides Demand sides
    Labor market 1. margin income tax rate 1. labor productivity
    2.retirement age -training & education
    3. unemployment benefits 2.marginal benefits of
    reform Employing labor
    -Payroll tax
    -corporate tax/share
    Loanable fund [household saving] [factory & government]
    market 1.Consumption taxes 1.budget deficit
    2. Capital gain taxes 2. marginal benefits of
    Investment
    -investment tax credit
    -corporate profit tax

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