1. Growth and Output Econ 102

2. GDP Growth Countries: High savings rate have higher GDP/ cap. high population growth rates have low GDP/ cap.

3. GDP Real (at 2005 US dollars)

4. GDP Real per capita ( at 2005 US dollars )

5. Real GDP in Different Axis

6. Short-run performance

7. Stylized Facts about Growth Countries with higher savings have higher income par capita. Countries with high population growth rates have lower income per capita. Some poorer countries tends to grow faster.

8. Solow model:

10. Solow model with increase in savings rate:

11. Solow model with improvement in technology :

12. Output grows over time:

13. Output growth rate:

14. Which output level is produced: Demand and Supply Aggregate Demand and Aggregate Supply

15. SR and LR Aggregate Supply There are constraints on Price changes and Output changes. Short run AS : price pressures are less, there are unemployed resources and if demand increases output increase without price increase. Long run AS: capacity of production is constant, an increase in demand increases prices but not quantity. Very long run: capacity is growing, shifts in the LRAS curve.

16. SR and LR Aggregate Supply SR Aggregate SupplyLR Aggregate Supply