宏观经济学原理 (三)

PRODUCTIONAND

25GROWTH

WHAT$NEWINTHESIXTHEDITION:

ThereisanewIntheNewsboxon''OneEconomist'sAnswer.”

LEARNINGOBJECTIVES:

Bytheendofthischapter,studentsshouldunderstand:

>howmucheconomicgrowthdiffersaroundtheworld.

>whyproductivityisthekeydeterminantofacountry'sstandardofliving.

>thefactorsthatdetermineacountry'sproductivity.

>howacountry'spoliciesinfluenceitsproductivitygrowth.

CONTEXTANDPURPOSE:

Chapter12iqthAfirstchapterinafour-chaptprsaquancanntheproductionofoutputinthalongrun.

Chapter12addressesthedeterminantsofthelevelandgrowthrateofoutput.Wefindthatcapitaland

laborareamongtheprimarydeterminantsofoutput.InChapter13,weaddresshowsavingand

investmentincapitalgoodsaffecttheproductionofoutput,andinChapter14,welearnaboutsomeof

thetoolspeopleandfirmsusewhenchoosingcapitalprojectsinwhichtoinvest.InChapter15,we

addressthemarketforlabor.

ThepurposeofChapter12stoexaminethelong-rundeterminantsofboththelevelandthegrowth

rateofrealGDPperperson.Alongtheway,wewilldiscoverthefactorsthatdeterminetheproductivity

ofworkersandaddresswhatgcvernmentsmightdotoimprovetheproductivityoftheircitizens.

KEYPOINTS:

•Economicprosperity,asmeasuredbyGDPperperson,variessubstantiallyaroundtheworld.The

averageincomeintheworldzsrichestcountriesismorethantentimesthatintheworld'spoorest

countries.Becausegrov/thratesofrealGDPalsovarysubstantially,therelativepositionsof

countriescanchangedramaticallyovertime.

432

©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,o-postedtoapubliclyaccessiblewebsite,inwholeorinpart.

•Thestandardoflivinginaneconomydependsontheeconomy'sabilitytoproducegoodsand

services.Productivity,inturn,dependsontheamountsofphysicalcapital,humancapital,natural

resources,andtechnologicalknowledgeavailabletoworkers.

•Governmentpoliciescantrytoinfluencetheeconomy'sgrowthrateinmanyways:encouraging

savingandinvestment,encouraginginvestmentfromabroad,fosteringeducation,promoting

goodhealth,maintainingpropertyrightsandpoliticalstability,allowingfreetrade,andpromoting

theresearchanddevelopmentofnewtechnologies.

•Theaccumulationofcapitalissubjecttodiminishingreturns:Themorecapitalaneconcmyhas,

thelessadditionaloutputtheeconomygetsfromanextraunitofcapital.Asaresult,while

highersavingleadstohighergrowthforaperiodoftime,growtheventuallyslowsdownasthe

economyapproachesahigherlevelofcapital,productivity,andincome.Alsobecauseof

diminishingreturns,thereturntocapitalisespeciallyhighinpoorcountries.Otherthingsbeing

equal,thesecountriescangrowfasterbecauseofthecatch-upeffect.

•Populationgrowthhasavarietyofeffectsoneconomicgrowth.Ontheonehand,morerapid

populationgrowthmaylowerproductivitybystretchingthesupplyofnaturalresourcesandby

reducingtheamountofcapitalavailableforeachworker.Ontheotherhand,alargerpopulation

mayenhancetherateoftechnologicalprogressbecausetherearemorescientistsandengineers.

CHAPTEROUTLINE：

I.EconomicGrowthAroundtheWorld

Table1|

A.Table1showsdataonrealGDPperpersonfor13counrriesduringdifferentperiodsoftime.

1.Thedatarevealthefactthatlivingstandardsvaryagreatdealbetweenthesecountries.

2.GrowthratesarealsoreportedInthetable.Japanhashadthelargestgrowthrateevertime,

2.76%peryear(onaverage).

UseTable1tomakethepointthataone-percentagepointchangeinacountry's

growthratecanmakeasignificantdifferenceoverseveralgenerations.Thepowerful

effectsofcompoundingshouldbeusedtounderscoretheprocessofeconomic

growth.

3.Becauseofdifferentgrowthrates,therankingofcountriesbyincomeperpersonchanges

overtime.

a.Inthelate19thcentury,theUnitedKingdomwastherichestcountryintheworld.

b.Today,incomeoerpersonislowerintheUnitedKingdomthanintheUnitedStates(a

formercolonyoftheUnitedKingdom).

434❖Chapter25/ProductionandGrowth

B.FYI:AreYouRicherThantheRichestAmerican?

1.AccordingtothemagazineAmericanHeritage,therichestAmericanofalltimeisJohnB.

Rockefeller,whosewealthtodaywouldbetheequivalentofapproximately$200billion.

2.Yet,becauseRockefellerlivedfrom1839to1937,hedidnotgetthechancetoenjoymany

oftheconvenienceswetakeforgrantedtodaysuchastelevision,airconditioning,and

modernmedicine.

3.Thus,becauseoftechnologicaladvances,theaverageAmericantodaymayenjoya"richer”

lifethantherichestAmericanwholivedacenturyago.

C.FYI:APictureIsWorthaThousandStatistics

1.Thisboxpresentsthreephotosshowingatypicalfamilyinthreecountries-theUnited

Kingdom,Mexico,andMali.Eachfamilywasphotographedoutsidetheirhome,togetherwith

alloftheirmaterialpossessions.

2.Thesephotosdemonstratethevastdifferenceinthestandardsoflivinginthesecomtries.

ILProductivity:ItsRoleardDeterminants

A.WhyProductivityIsSoImportant

1.Example:RobinsonCrusoe

a.Becauseheissrrandedalone,hemustcatchhisownfish,growhisownvegetables,and

makehisowndothes.

b.Hisstandardoflivingdependsonhisabilitytoproducegoodsandservices.

2.Definitionofuroductivity:theamountofgoodsandservicesaworkerproducesin

eachhourofwork.

3.ReviewofPrinciple#8:ACountry'sStandardofLivingDependsonItsAbilitytoProduce

GoodsandServices.

B.HowProductivityIsDetermined

1.PhysicalCapitalperWorker

a.Definitionofphysicalcapital:thestockofequipmentandstructuresthatare

usedtoproducegoodsandservices.

b.Example:Crusoewillcatchmorefishifhehasmorefishingpoles.

2.HumanCapitalperWorker

a.Definitionofhumancapital:theknowledgeandskillsthatworkersacquire

througheducation,training,andexperience.

b.Example:Crusoewillcatchmorefishifhehasbeentrainedinthebestfishingtechniques

orashegainsexperiencefishing.

©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,o,postedtoapubliclyaccessiblewebsite,inwholeorinpart.

3.NaturalResourcesperWorker

a.Definitionofnatural「esnurces:theinputsintotheproductionofgoodsand

servicesthatareprovidedbynature,suchasland,rivers,andmineraldeposits.

b.Example:Crusoewillhavebetterluckcatchingfishifthereisaplentifulsupplyaround

hisisland.

4.TechnologicalKnowledge

a.Definitionoftechnologicalknowledge:society'sunderstandingofthebestways

toproducegoodsandservices.

b.Example:Crusoewillcatchmorefishifhehasinventedabetterfishinglure.

c.CaseStudy:AreNaturalResourcesaLimittoGrowth?y\\\ssectionpointsoutthatasthe

populationhasgrownovertime,wehavediscoveredwaystolowerouruseofnatural

resources.Thus,mosteconomistsarenotworriedaboutshortagesofnaturalresources.

CastAway.ChuckNolandisstrandedonanislandalone.Hisabilitytoconsumeis

solelydependentonhisabilitytoproduce.

C.FYI:TheProductionFunction

1.Aproductionfunctiondescribestherelationshipbetweenthequantityofinputsusedin

productionandthequantityofoutputfromproduction.

2.Theproductionfunctiongenerallyiswrittenlikethis:

Y=AF(L,K,H,N)

whereY-output,L=quantityoflabor,K=quantityofphysicalcapital,H=quantityof

humancapital,N=quantityofnaturalresources,Areflectstheavailableproduction

technology,and尸()isafunctionthatshowshowinputsarecombinedtoproduceoutput.

3.Manyproductionfunctionshaveapropertycalledconstantreturnstoscale.

a.Thispropertyimpliesthatasallinputsaredoubled,outputwillexactlydouble.

b.Thisimpliesthatthefollowingmustbetrue:

xY^AF(xL,xK,xH,xN)

wherex=2ifinputsaredoubled.

c.Thisalsomeansthatifwewanttoexamineoutputperworkerwecouldsetx=l/£and

wewouldgetthefollowing:

Y/L=AF(1,K/L,H/L/N/L)

436❖Chapter25/ProductionandGrowth

Thisshowsthatoutputperworkerdependsontheamountofphysical

capitalperworker(K/Cj,theamountofhumancapitalperworker(HID,

andtheamountofnaturalresourcesperworker(A//£).

III.EconomicGrowthandPublicPolicy

Startoutbyaskingstudentswhatfactorstheybelievewillleadtogreatereconomic

growthinthefuture.

A.SavingandInvestment

1.Becausecapitalisaproducedfactorofproduction,asocietycanchangetheamountof

capitalthatithas.

2.However,thereisanopportunitycostofdoingso;vresourcesareusedtoproducecapital

goods,fewergoodsandservicesareproducedforcurrentconsumption.

B.DiminishingReturnsandtheCatch-UpEffect

1.Definitionofdiminishingreturns:thepropertywherebythebenefitfromanextra

unitofaninputdeclinesasthequantityoftheinputincreases.

Figure1

a.Asthecapitalstockrises,theextraoutputprodjcedfromanadditionalunitofcapitalwill

fall.

b.ThiscanbeseeninFigure1,whichshowshowtheamountofcapitalperworker

determinestheamountofoutputperworker,holdingconstantallotherdeterminantsof

output.

c.Thus,ifworkersalreadyhavealargeamountofcapitaltoworkwith,givingtheman

additionalunitofcapitalwillnotincreasetheirproductivitybymuch.

d.Inthelongrun,ahighersavingrateleadstoahigherlevelofproductivityandincome,

butnottohighergrowthratesinthesevariables.

2.Animportantimplicationofdiminishingreturnsisthecatch-upeffect.

a.Definitionofcatch-ut>effect:thepropertywherebycountriesthatstartoffpoor

tendtogrowmorerapidlythancountriesthatstartoffrich.

b.Whenworkershaveverylittlecapitaltobeginwith,anadditionalunitofcapitalwill

increasetheirproductivitybyagreatdeal.

C.InvestmentfromAbroad

1.Savingbydomesticresidentsisnottheonlywayforacountrytoinvestinnewcapital.

2.Investmentinthecountrybyforeignerscanalsooccur.

©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,o,postedtoapubliclyaccessiblewebsite,inwholeorinpart.

a.Foreigndirectinvestmentoccurswhenacapitalinvestmentisownedandoperatedbya

foreignentity.

b.Foreignportfolioinvestmentoccurswhenacapitalinvestmentisfinancedwithforeign

moneybutoperatedbydomesticresidents.

3.Someofthebenefitsofforeigninvestmentflowbacktoforeignowners.Buttheeconomystill

experiencesanincreaseinthecapitalstock,whichleadstohigherproductivityandhigher

wages.

4.TheWorldBankisanorganizationthattriestoencouragetheflowofinvestmenttopoor

countries.

a.TheWorldBankobtainsfundsfromdevelopedcountriessuchastheUnitedStatesand

makesloanstoless-developedcountriessothattheycaninvestinroads,sewersystems,

schools,andothertypesofcapital.

b.TheWorldBankalsooffersthesecountriesadviceonhowbesttousethesefunds.

D.Education

1.Investmentinhumancapitalalsohasanopportunit/cost.

a.Whenstudentsareinclass,theycannotbeproducinggoodsandseivicesfor

consumption.

b.Inless-developedcountries,thisopportunitycostisconsideredtobehigh;asaresult,

childrenoftendropoutofschoolatayoungage.

2.Becausetherearepositiveexternalitiesineducation,theeffectoflowereducationonthe

economicgrowthrateofacountrycanbelarge.

3.Manypoorcountriesalsofacea''braindrain,z—thebesteducatedoftenleavetogotoother

countrieswheretheycanenjoyahigherstandardofliving.

4.IntheNews:PromotingHumanCapital

a.Humancapitalisakeytoeconomicgrowth.

b.Thisisanarticlethatdescribeshowsomedevelopingcountriesnowgiveparentsan

immediatefinancialincentivetokeeptheirchildreninschool.

E.HealthandNutrition

1.Humancapitalcanalsobeusedtodescribeanothertypeofinvestmentinpeople:

expendituresthatleadtoahealthierpopulation.

2.Otherthingsbeingequal,healthierworkersaremoreproductive.

3.Makingtherightinvestmentsinthehealthofthepopulationisonewayforanationto

increaseproductivit/.

F.PropertyRightsandPolticalStability

438❖Chapter25/ProductionandGrowth

1.Protectionofpropertyrightsandpromotionofpoliticalstabilityaretwootherimportantways

thatpolicymakerscanimproveeconomicgrowth.

2.Thereislittleincentivetoproduceproductsifthereisnoguaranteethattheycannotbe

taken.Contractsmustalsobeenforced.

3.Countrieswithquestionableenforcementofpropert/rightsoranunstablepoliticalclimate

willalsohavedifficultyinattractingforeign(oreverdomestic)investment.

G.FreeTrade

1.Somecountrieshavetriedtoachievefastereconomicgrowthbyavoidingtransactingwith

therestoftheworld.

2.However,tradeallowsacountrytospecializeinwhatitdoesbestandthusconsumebeyond

itsproductionpossibilities.

3.Whenacountrytradeswheatforsteel,itisaswelloffasitwouldbeifithaddevelopeda

newtechnologyforturningwheatintosteel.

4.Theamountanationtradesisdeterminednotonlybygovernmentpolicybutalsoby

geography.

a.Countrieswithgood,naturalseaportsfindtradeeasierthancountrieswithoutthis

resource.

b.Countrieswithmorethan80percentoftheirpopulationlivingwithin100kilometersofa

coasthaveanaverageGDPperpersonthatisfourtimesaslargeascountrieswith20

percentoftheirpopulationlivingnearacoast.

H.ResearchandDevelopment

1.Theprimaryreasonwhylivingstandardshaveimprovedovertimehasbeenduetolarge

increasesintechnologicalknowledge.

2.Knowledgecanbeconsideredapublicgood.

3.TheU.S.governmentpromotesthecreationofnewtechnologicalinformationbyproviding

researchgrantsancprovidingtaxincentivesforfirmsengagedinresearch.

4.Thepatentsystemalsoencouragesresearchbygrantinganinventortheexclusiverightto

producetheproductforaspecifiednumberofyears.

I.PopulationGrowth

1.StretchingNaturalResources

a.ThomasMalthus(anEnglishministerandearlyeconomicthinker)arguedthatanever-

increasingpopulationmeantthattheworldwasdoomedtoliveinpovertyforever.

©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,o,postedtoapubliclyaccessiblewebsite,inwholeorinpart.

b.However,hefailedtounderstandthatnewideaswouldbedevelopedtoincreasethe

productionoffoodandothergoods,includingpesticides,fertilizers,mechanized

equipment,andnewcropvarieties.

2.DilutingtheCapitalStock

a.HighpopulationgrowthreducesGDPperworkerbecauserapidgrowthinthenumberof

workersforcesthecapitalstocktobespreadmorethinly.

b.Countrieswithahighpopulationgrowthhavelergenumbersofschool-agechildren,

placingaburdenontheeducationsystem.

3.Somecountrieshavealreadyinstitutedmeasurestoreducepopulationgrowthrates.

4.Policiesthatfosterequaltreatmentforwomenshouldraiseeconomicopportunitiesfor

womenleadingtolowerratesofpopulation.

5.PromotingTechnologicalProgress

a.Someeconomistshavesuggestedthatpopulationgrowthhasdriventechnological

progressandeconomicprosperity.

b.Ina1993journalarticle,economistMichaelKremerprovidedevidencethatincreasesin

populationleadtotechnologicalprogress.

Startaclassdiscussionofthetrade-offsthatarenecessarytosustaineconomic

growth.Pointoutthatcurrentconsumptionmustbeforgoneforhigherconsumption

inthefuture.Askstudentstoexaminethetrade-offsinvolvedwitheachofthepublic

policiesdiscussed.

J.IntheNews:OneEconomist/sAnswer

1.Whydosomenationsthrivewhileothersdonot?

2.ThisisanarticlebyeconomistDaronAcemogluprovidinghisideasontheanswerstothis

question.

SOLUTIONSTOTEXTPROBLEMS:

QuickQuizzes

1.TheapproximategrowthrateofrealGDPperpersonintheUnitedStatesis1.80pe-cent

(basedonTable1)from1870to2008.CountriesthathavehadfastergrowthincludeJapan,

Brazil,Mexico,Germany,Canada,China,andArgendna;countriesthathavehadslower

growthincludeUnitedKingdom,India,Indonesia,Pakistan,andBangladesh.

2.Thefourdeterminantsofacountry'sproductivityare:(1)physicalcapital,whichisthestock

ofequipmentandstructuresthatareusedtoproducegoodsandservices;(2)humancapital,

whichistheknowledgeandskillsthatworkersacquirethrougheducation,training,and

experience;(3)naturalresources,whichareinputsintoproductionthatareprovidedby

440❖Chapter25/ProductionandGrowth

nature,suchasland,rivers,andmineraldeposits;and(4)technologicalknowledge,whichis

society'sunderstandingofthebestwaystoproducegoodsandservices.

3.Waysinwhichagovernmentpolicymakercantrytoraisethegrowthinlivingstandardsina

societyinclude:(1)investingmorecurrentresourcesintheproductionofcapital,whichhas

thedrawbackofreducingtheresourcesusedforproducingcurrentconsumption;(2)

encouraginginvestmentfromabroad,whichhasthedrawbackthatsomeofthebenefitsof

investmentflowtoforeigners;(3)increasingeducation,whichhasanopportunitycostinthat

studentsarenotengagedincurrentproduction;(4)protectingpropertyrightsandpromoting

politicalstability,forwhichnodrawbacksareobvious;(5)pursuingoutward-orientedpolicies

toencouragefreetrade,whichmayhavethedrawbackofmakingacountrymoredependent

onitstradingpartners;(6)reducingtherateofpopulationgrowth,whichmayhavethe

drawbacksofreducingindividualfreedomandloweringtherateoftechnologicalprogress;

and(7)encouragingresearchanddevelopment,which(likeinvestment)mayhavethe

drawbackofreducingcurrentconsumption.

QuestionsforReview

1.Thelevelofanation'sGDPmeasuresboththetotalincomeearnedintheeconomyandthe

totalexpenditureontheeconomy'soutputofgoodsandservices.ThelevelofrealGDPisa

goodgaugeofecoromicprosperity,andthegrowthofrealGDPisagoodgaugeofeconomic

progress.YouwouldratherliveinanationwithahighlevelofGDP,eventhoughithadalow

growthrate,thaninanationwithalowlevelofGDPandahighgrowthrate,becausethe

levelofGDPisameasureofprosperity.

2.Thefourdeterminantsofproductivityare:(1)physicalcapital,whichisthestockof

equipmentandstructuresthatareusedtoproducegoodsandservices;(2)humancapital,

whichconsistsoftheknowledgeandskillsthatworkersacquirethrougheducation,zraining,

andexperience;(3)naturalresources,whichareinputsintoproductionthatareprovidedby

nature;and(4)technologicalknowledge,whichissociety'sunderstandingofthebestways

toproducegoodsandservices.

3.Acollegedegreeisaformofhumancapital.Theskllslearnedinearningacollegedegree

increaseaworker'sproductivity.

4.Highersavingmeansfewerresourcesaredevotedtoconsumptionandmoretoproducing

capitalgoods.Theriseinthecapitalstockleadstorisingproductivityandmorerapidgrowth

inGDPforawhile.Inthelongrun,thehighersavingrateleadstoahigherstandardofliving.

Apolicymakermightbedeterredfromtryingtoraisetherateofsavingbecausedoingso

requiresthatpeoplereducetheirconsumptiontodayanditcantakealongtimetogettoa

higherstandardofliving.

5.Ahigherrateofsavingleadstoahighergrowthratetemporarily,notpermanently.Inthe

shortrun,increasedsavingleadstoalargercapitalstockandfastergrowth.Butasgrowth

continues,diminishingreturnstocapitalmeangrowthslowsdownandeventuallysettles

downtoitsinitialrate,thoughthismaytakeseveradecades.

6.Removingatraderestriction,suchasatariff,wouldleadtomorerapideconomicgrowth

becausetheremovalofthetraderestrictionactslikeanimprovementintechnology.Free

tradeallowsallcountriestoconsumemoregoodsandservices.

©2012CengageLearning.AllRightsReserved.Maynotbescanned,copiedorduplicated,o,postedtoapubliclyaccessiblewebsite,inwholeorinpart.

7.Thehighertherateofpopulationgrowth,theloweristhelevelofGDPperpersonbecause

there'slesscapitalperperson,hencelowerproductvity.

8.TheU.S.governmenttriestoencourageadvancesintechnologicalknowledgebyproviding

researchgrantsthroughtheNationalScienceFoundationandtheNationalInstituteofHealth,

withtaxbreaksforfirmsengaginginresearchanddevelopment,andthroughthepatent

system.

ProblemsandApplications

1.Thefactsthatcountriesimportmanygoodsandservicesyetmustproducealargequantity

ofgoodsandservicesthemselvestoenjoyahighstandardoflivingarereconciledbynoting

thattherearesubstantialgainsfromtrade.Inordertobeabletoaffordtopurchasegoods

fromothercountries,aneconomymustgenerateincome.Byproducingmanygoodsand

services,thentradingthemforgoodsandservicesproducedinothercountries,anation

maximizesitsstandardofliving.

2.a.Moreinvestmentwouldleadtofastereconomicgrowthintheshortrun.

b.Thechangewouldbenefitmanypeopleinsocietywhowouldhavehigherincomesasthe

resultoffastereconomicgrowth.However,theremightbeatransitionperiodirwhich

workersandownersinconsumption-goodindustrieswouldgetlowerincomes,and

workersandownersininvestment-goodindustrieswouldgethigherincomes.ITaddition,

somegroupwouldhavetoreducetheirspendingforsometimesothatinvestmentcould

rise.

3.a.Privateconsumptionspendingincludesbuyingfoodandbuyingclothes;private

investmentspendingincludespeoplebuyinghousesandfirmsbuyingcomputers.Many

otherexamplesarepossible.Educationcanbeconsideredasbothconsumptionand

investment.

b.Governmentconsumptionspendingincludespayingworkerstoadministergovernment

programs;governmentinvestmentspendingincludesbuyingmilitaryequipmentand

buildingroads.Manyotherexamplesarepossible.Governmentspendingonhealth

programsisaninvestmentinhumancapital.Thisistruerforspendingonhealth

programsfortheyoungratherthanthosefortheelderly.

4.Theopportunitycostofinvestingincapitalisthelossofconsumptionthatresultsfrom

redirectingresourcestowardinvestment.Over-investmentincapitalispossiblebecauseof

diminishingmarginalreturns.Acountrycan"over-invest"incapitalifpeoplewouldpreferto

havehigherconsumptionspendingandlessfuturegrowth.Theopportunitycostofinvesting

inhumancapitalisalsothelossofconsumptionthatisneededtoprovidetheresourcesfor

investment.Acountrycould"over-invest"inhumancapitalifpeopleweretoohighly

educatedforthejobstheycouldget—forexampl