ModuleGrowth Policy:Why EconomicGrowth Rates Differ

KRUGMAN'SMACROECONOMICS for AP*

39

Margaret Ray and David Anderson

What you will learnWhat you will learn

in thisin this ModuleModule::

• The factors that explain why long-run growth rates differ so much among countries

• The challenges of growth posed by scarcity of natural resources, environmental degradation, and efforts to make growth sustainable

Thomas Alva Thomas Alva EdisonEdison

Why Growth Rates DifferWhy Growth Rates Differ

• Capital, Technology, and Growth Differences

• Adding to Physical Capital

• Adding to Human Capital

• Technological Progress

Why Growth Rates DifferWhy Growth Rates Differ• The Role of Government in

Promoting Economic Growth

• Governments and Physical Capital

• infrastructure

• Governments and Human Capital

• Governments and Technology

• Political Stability, Property Rights and Excessive Intervention

Is World Growth Is World Growth Sustainable?Sustainable?

• Sustainable Growth?

• Natural Resources and Growth, Revisited

• Economic Growth and the Environment

Is World Growth Is World Growth Sustainable?Sustainable?

• 3 Questions

• How large are the supplies of key natural resources?

• How effective will technology be at finding alternatives to natural resources?

• Can long - run economic growth continue in the face of resource scarcity?

Table 39.1 Human Capital in Latin America and East Asia

Ray and Anderson: Krugman’s Macroeconomics for AP, First EditionCopyright © 2011 by Worth Publishers

Figure 39.2 U.S. Oil Consumption and Growth over TimeRay and Anderson: Krugman’s Macroeconomics for AP, First

EditionCopyright © 2011 by Worth Publishers

Figure 39.3 Climate Change and GrowthRay and Anderson: Krugman’s Macroeconomics for AP, First

EditionCopyright © 2011 by Worth Publishers