1. ECO 1 ECONOMIC GROWTH AND BUSINESS CYCLES
Erkmen Giray ASLIM (erkmengirayaslim.com)
11/13/2015
Department of Economics
Lehigh University

2. BACKGROUND INFORMATION
How can we define business cycles?
Economic expansion and recession.

3. MORE ON BUSINESS CYCLES

4. DISCUSSION ON BUSINESS CYCLES

5. THE EFFECT ON UNEMPLOYMENT RATE

6. LONG-RUN ECONOMIC GROWTH
The process by which rising productivity increases the average standard of living.

7. POTENTIAL GDP
The level of real GDP attained when all firms are producing at capacity.
Operating at normal hours and using a normal workforce.

8. RULE OF 70
If real GDP per capita growth rate is 5 percent per year, then it will take 70/5 = 14 years for real GDP per capita to double .
Proof: (Hint: Use ln2 = 0.69) G(t) = G(0) x ert

9. DETERMINANTS OF LONG-RUN GROWTH
Labor productivity.
Increase in capital.
Technological change.
Y = F(A, K, L)

10. DISCUSSION ON ECONOMIC GROWTH