economic growth & its determinants

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Economic growth & its determinants

Economic growthRepresents the expansion of a countrys national output.

productivityDenotes the ratio of output in a weighted average of inputs.4 wheels of growth

Human resourcesLabor supply, education, discipline, motivation.

Natural resourcesLand, minerals, fuels, environmental quality.

Capital formationMachines, factories, roads.

Technological change

Human resources

Labour inputs consist of quantities of workers and of the skills of the workforce.~Labor force~

Consists of all those people 15 years of age or older who are currently employed or looking for work.Trends in Labor Force:The Last 50 Years

Blue collarWorkers that take their name from the denim shirts often wornby those who perform physical labor .

White collarJobs that take their name fromthe white shirts traditionally worn bymen & women who works instores & offices.

Blue collar jobs increasing!

White collar job!

The proportion of women in the labor force has been increasing

Just before WWII, in 1940, only 28 out of every 100 workers were women. By 1947 their numbers had grown up 36 out of 100 workers.

Right now there are now 60 women for every 100 workers in the labor force. Workers have been leaving the farm

Overall employment in the farming industry is expected to decline as small farms are consolidated into commercial areas.

Labor has been earning higher wages while working comparable hours

In the early 1950s the typical factory worker in the US was paid out of $60. due to the inflation it rises in to $350 during 1992.

Education has been increasingly important

Technology has given a tight trained for labor force. Those lacking necessary skills and adequate schooling have far more difficulty earning a living than those who complete their education.Natural resources

Capital formation

It is also called social overhead capital.

Technological change

Denotes changes in the process of production or introduction of new products or services.

The classical dynamics of smith and malthusAdam SmithThat original state of things, which precedes both the appropriation of land & the accumulation of stock.

This was a time when land was freely available to all, and before capital accumulation had begun to matter.

Thomas Malthus

Works of Thomas Malthus:

1800:The present high price of provisionsIn this work, his first published pamphlet, Malthus argues against the notion prevailing in his locale that the greed of intermediaries caused the high price of provisions.

1815:The policy of restricting the importation of GrainMalthus emerged as the only economist of note to supportcustomsdutyon imported grain. He had changed his mind from the previous year, siding now with the protectionists. Foreign laws, he noted, often prohibit or raise taxes on the export of corn in lean times, which meant that the British food supply could become captive to foreign politics. By encouraging domestic production, Malthus argued, the Corn Laws would guarantee Britishself-sufficiencyin food.

1820:Principles of political economy

1827:Definitions in political economy

j curve population crash model

Negative checks (decreased birth rate).Negative Checks were used to limit the population growth. It included abstinence/ postponement of marriage which lowered the fertility rate.Positive checks (increased death rate)Positive Checks were ways to reduce population size by events such as famine, disease, war - increasing the mortality rate and reducing life expectancy.

Was Malthus right?

There has been a population explosion.

Africa repeated famines, wars, food crisis, environmental degradation, soil erosion, crop failure and disastrous floods so was he right?ButTechnological improvement which he could not have foreseen.The increased amount of cropland due to irrigation.Reduced population growth as countries move through the DTM.

The club of RomeGroup of industrialists, scientists, economists and statesmen from 10 countries.Published The Limits to Growth in 1972.END OF THE PRESENTATION


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