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    Lecture 1 Introduction Sal-i-Martin

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    Muhammad Bilal Makhdoom
    Chapter of Introduction on Economic growth

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    Lecture 1 Introduction Sal-i-Martin

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    Muhammad Bilal Makhdoom
    34 views7 pages
    Chapter of Introduction on Economic growth

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    Chapter of Introduction on Economic growth

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    34 views7 pages

    Lecture 1 Introduction Sal-i-Martin

    Uploaded by

    Muhammad Bilal Makhdoom
    Chapter of Introduction on Economic growth

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 7

    3/17/2022

    ECONOMIC GROWTH MODELS

    Dr. Iftikhar Yasin

    Department of Economics
    The University of Lahore

    Copyright © 2010 Worth Publishers

    1.1 The Importance of Growth

    1.2 The World Income Distribution

    Economic Growth Models 1.3 Empirical Regularities About


    Economic Growth
    Marks Distribution and readings

    1.1
    The Importance of Economic Growth

    What is GDP per Capita ?

    1870 2000 Growth Rate


    United States $3,340 $33,330 1.8 %

    1
    3/17/2022

    1.1
    The Importance of Economic Growth

    US GDP Per Capita

    1870 2000 Growth Rate


    United States $3,340 $9,450 0.8 %

    India: 0.64%
    Pakistan: 0.88%
    Philippines: 0.86%

    1.1
    The Importance of Economic Growth

    US GDP Per Capita

    1870 2000 Growth Rate


    United States $3,340 $127,000 2.8 %

    Japan: 2.95%
    Taiwan: 2.75%

    1.1
    The Importance of Economic Growth
    Mean: $3390, SD:0.89, Tanzania: $381, US $12,270, Switzerland US$ 14,980

    2
    3/17/2022

    1.1
    The Importance of Economic Growth
    Mean: $8490, SD:1.12, Tanzania: $482 , US $ 33,330, Luxembourg: $43,990

    1.1
    The Importance of Economic Growth

    Poorest vs Richest

    • It would take Tanzania 235 years to catch up US, if it grows at 1.8% per year
    • It would take Tanzania 154 years to catch up US, if it grows at 2.75% per
    year

    1.1
    The Importance of Economic Growth

    3
    3/17/2022

    1.1
    The Importance of Economic Growth

    Poorest vs Richest

    •Forty-year differences in growth rates of this magnitude have enormous


    consequences for standards of living.
    •Taiwan raised its real per capita GDP by a factor of 13 from $1430 in 1960
    (rank 76 out of 113 countries) to $18,730 in 2000 (rank 24 of 150), while the
    •Democratic Republic of Congo lowered its real per capita GDP by a factor of
    0.3 from $980 in 1960 (rank 93 of 113) to $320 in 1995.

    1.2
    The World Income Distribution

    1.2
    The World Income Distribution

    4
    3/17/2022

    1.2
    The World Income Distribution

    1.2
    The World Income Distribution

    1.2
    The World Income Distribution

    5
    3/17/2022

    1.3
    Empirical Regularities About Economic Growth

    Kaldor (1963) listed number of Stylized facts about economic growth

    1. Per capita output grows over time, and its growth rate does not tend to
    diminish.
    2. Physical capital per worker grows over time.
    3. The rate of return to capital is nearly constant.
    4. The ratio of physical capital to output is nearly constant.
    5. The shares of labor and physical capital in national income are nearly
    constant.
    6. The growth rate of output per worker differs substantially across countries

    1.3
    Empirical Regularities About Economic Growth

    1.3
    Empirical Regularities About Economic Growth

    6
    3/17/2022

    1.3
    Empirical Regularities About Economic Growth

    Marks Distribution and Readings

    Midterm Examinations 30 %

    Assignments 10 %

    Class Participation / 10%


    Presentations
    Quizzes 10%
    Final Exam 40%

    Source:

    Robert J. Barro AND Xavier Sala-i-Martin. Economic Growth. The MIT Press, Cambridge,
    Massachusetts, London, England,. Second Edition.

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