Chapter 16 - Economic growth and the new economy. In this chapter, the following content will be discussed: About the ingredients of economic growth, about production possibility analysis, about Canada’s economic growth rates, about productivity growth and the new economy.
Trang 1Chapter 16
ECONOMIC GROWTH
&
THE NEW ECONOMY
SLIDES PREPARED BY JUDITH SKUCE, GEORGIAN COLLEGE
Trang 2In this chapter you will learn
About the ingredients of economic
growth
About production possibility analysis
About Canada’s economic growth rates
About productivity growth and the new
economy
Trang 3Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?
Trang 4Ingredients of Growth
Supply Factors
Trang 5Ingredients of Growth
Supply Factors
Trang 9Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?
Trang 10Production Possibilities Analysis
Growth & Production Possibilities
Economic growth
Figure 16-1
a
D C
b
Trang 11Production Possibilities Analysis
Labour & Productivity
Real GDP
Real GDP
Trang 12Production Possibilities Analysis
Growth in the AD-AS Model
Trang 16Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?
Trang 17Canadian Economic Growth
Rates
Real GDP in the last half century has increased over sixfold
Growth particularly strong in the 1960s, but declined
during the 1970s & 1980s
Trang 19Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?
Trang 20Accounting for Growth
Post-1950 productivity growth greater
than can be attributed to increases in
labour & capital
increased
Trang 21Accounting for Growth
Inputs Versus Productivity
• productivity growth has been a significant
force in the growth of real GDP
• productivity growth slowed from the
mid-1970s to early 1990s
Trang 22Accounting for Growth
Quantity of Labour
• both population & labour force have
increased
Trang 23Accounting for Growth
Technological Advance
• process innovation
• product innovation
Trang 24Accounting for Growth
Quantity of Capital
• almost 45% of the annual growth of real
output since 1961 is attributable to increases in the quantity of capital
• public investment in infrastructure also
important
Trang 25Accounting for Growth
Education & Training
• educational attainment has increased
• concerns about quality
Trang 26Accounting for Growth
Resource Allocation & Scale
Economies
• economies of scale
• improved resource allocation
manufacturing
Trang 27Accounting for Growth
Resource Allocation & Scale
Economies
• economies of scale
• improved resource allocation
manufacturing
Trang 28Accounting for Growth
Resource Allocation & Scale
Economies
• economies of scale
• improved resource allocation
manufacturing
Trang 29Accounting for Growth
Trang 30Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?
Trang 31Productivity Growth & the New
Economy
Characteristics of the New Economy
• The Microchip & Information Technology
• New Firms & Increasing Returns
Trang 32Productivity Growth & the New
Economy
Characteristics of the New Economy
• The Microchip & Information Technology
• New Firms & Increasing Returns
• Global Competition
Macroeconomic Implications
• Faster, Non-Inflationary Growth
• Low Natural Rate of Unemployment
• Growing Tax Revenues
Trang 33Productivity Growth & the New
Economy
Skepticism about the New Economy
Trang 34Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?
Trang 35Is Growth Desirable &
Trang 36Is Growth Desirable &
Sustainable?
In Defense of Economic Growth
• higher living standards
• growth enables societal improvements
• working conditions have improved
• limiting growth not the solution to
environmental problems
• growth is sustainable
Trang 37Chapter 16 Topics
Ingredients of Growth
Production Possibilities Analysis
Canadian Economic Growth Rates
Accounting for Growth
Productivity Growth & the New
Economy
Is Growth Desirable & Sustainable?