Chapter 12

ECON 2012，主要包含Production、 Growth、Goverment policy等内容。

Chapter 12

• Production
  • quantity produced from each unit of labor input
  • more productive--large real GDP/high income
  • how to detemined
    • (physical) capital
      • eqipment and structure
    • human capital
      • knowledge ans skill
    • natural resources
      • input into the production provided by nature
        • renewable resources
        • nonrenewable resources: crude oil, minerals
      • lead to variety of living standard but not necessary to guarantee a higher productivity
    • technological knowledge
      • soiciety's understandings of the best ways to produce
        • a lure鱼饵 is invited byxxx
          • common knowledge
          • proprietary
  • Production function
    • Y=A × F(L,K,H,N)
      • A:科技水平
      • L: Labor数量
      • K: Physical capital
      • H: Human capital
      • N； natural resources
      • constant return to scale
        • xY=A × F(xL, xK, xH, xN)
        • 整体除以labor
  • The catch up effect
    • shown as aspital, productivity,income rise
• Growth
  • a society's standard of living depends on
    • ability to produce goods and servises depends on
      • physical capital per worker
      • human capital per worker
      • natural resources per worker
      • technological knowledge
• Goverment policy
  • 1 saving and investment
    • invest more current resources inthe production of capital(将更多现在资源投入资本生产)
    • devote less resources for current consumption(少投入于消费)
    • Trade-off sacrifice current consumption to increase future consumption
    • Higher saving rate
      • more resources to make capital goods(资本品？？去查)
      • capital stock increases--------long term economic growth
  • 2 investment from abroad
    • domestic saving and foreign investment increase capital stock
      • foreigners' investment includes
        • Foreign derect in vestment(owned and operated by foreign entity（完全外国拥有和经营）
      • Foreign portfolio investment
        • Financed wirh foreign money but operated by domestic residents（外国提供资金，本国居民经营）
    • benefits
      • some benefits flow back to foreign capital owners
      • increase the economy's stock of capital
      • higher productivity and higher wages
      • state-of-the-art technologies先进技术 developed in other countries
      • especially good for poor countries(cannot generate enough saving to fund invesetment projects themselves)
    • World Bank & IMF
      • TO achieve common goal of promotinf economic prosperity in developing nations目标：实现发展中国家经济繁荣
      • encourages flow of capital to poor countries
      • funds from world's advanced countries
      • make loans to less developed countries
  • 3 education
    • human capital
    • opportunity cost: wages forgone放弃的工资
    • conveys positive ecternalities正外部性
    • PROBLEM: Brain drain: emigration of most educated workers to rich countries
  • 4 health and nutrition
    • investment in human capital
    • raising caloric intake raises productivity
    • height---an indicator of productivity
  • 5 property rights and political stability
    • protect property right
    • court, justice system, national guards enforce property rights
    • promote political stability
  • 6 free trade
    • Inward-oriented policies
      • aim to raise living standards by avoiding interaction with other countries
    • Outward-oriented policies
      • promote integration with the world economy(elimination of restrictions of foreign)
    • trade has similar effects as discovering new technologies(improving productivity and living standards)
  • 7 Research and development
    • technoligical progress----main reason of living standard raises
    • knowledge----public good
    • policies to promote technological progress
  • 8 population growth
    • large population
      • more workers----larger total output
      • more consumers
    • effects
      • stretching natural resources
        • Mlathus argued the population growth will
          • strain society's ability to provide for itself
          • doomed to forever live in poverty(人们永远生活在贫困中）
          • failed to account for technological progress and productivity growth没考虑技术进步和生产力增长
      • diluting the capital stock 稀释股本
        • higher L, lower K/L-------lower productivity & living standards
          • developing countries
            • reducing population growth rate help improving living standards
      • promoting technological progress
        • engine for advance
          • michael kremer human history
            • growth rates increase as the world's population growth
            • more populated regions grew faster than ;ess populated ones
• Diminishing Returns
  • the marginal product declines as the quantity of that input increases