ModuleProductivityand Growth

KRUGMAN'SMACROECONOMICS for AP*

38

Margaret Ray and David Anderson

What you will learnWhat you will learn

in thisin this ModuleModule::

• How changes in productivity are illustrated using an aggregate production function

• How growth has varied among several important regions of the world and why the convergence hypothesis applies to economically advanced countries

Accounting for Growth: The Accounting for Growth: The Aggregate Production FunctionAggregate Production Function

• Aggregate Production Function

• Diminishing Returns to Physical Capital

• Growth Accounting

• Total Factor Productivity

Accounting for Growth: The Accounting for Growth: The Aggregate Production FunctionAggregate Production Function

What About Natural Resources?What About Natural Resources?

•Other things equal, more natural resources leads to higher GDP per capita

•Other things are often NOT equal

•Malthus

Success, Disappointment, Success, Disappointment, and Failureand Failure

• East Asia’s Miracle

• convergence hypothesis

• Latin America’s Disappointment

• Africa’s Troubles