2. ECONOMIC GROWTH Pertemuan 13
Matakuliah : J0114-Teori Ekonomi
Tahun : 2009
ECONOMIC GROWTH Pertemuan 13

3. Ingredients of Growth Supply Factors
Increases in Quantity and Quality of Natural Resources
Increases in Quality and Quantity of Human Resources
Increases in the Supply (or Stock) of Capital Goods
Improvements in Technology
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4. Ingredients of Growth Demand Factor Efficiency Factor
Households, Businesses, And Government Must Purchase the Economy’s Expanding Output of Goods and Services
Efficiency Factor
Must Achieve Economic Efficiency and Full Employment
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5. Production Possibilities
Production Possibilities Curve C A
Economic
Growth
Capital Goods c b a
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Consumer Goods

6. Labor and Productivity
Real GDP = Hours of Work x Labor Productivity
Size of Employed Labor Force
Labor
Inputs
(Hours of
Work)
Average Hours of Work
Real
GDP
Technological Advance
Quantity of Capital
Education and Training
Allocative Efficiency
Other
Labor
Productivity
(Average Output per Hour)
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7. Growth in the AD-AS Model
Production Possibilities and Aggregate Supply
ASLR1
ASLR2 C A
Capital Goods
Price Level B D
Consumer Goods
Real GDP
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8. Growth in the AD-AS Model
Production Possibilities and Aggregate Supply
Depicting U.S. Growth with AD-AS Model
ASLR1
ASLR2
AS2
AS1
Price Level P2 P1
AD2
AD1 Q1 Q2
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Real GDP

9. Accounting for Growth Growth Accounting U.S. Economic Growth Rates
U.S. Economic Growth, Annual Averages for Five Decades
Real GDP
Real GDP Per Capita
Average Annual Increase (Percent)
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Year
Source: Bureau of Economic Analysis

10. Accounting for Growth Factors Underlying Growth
Increases in Hours of Work
Increases in Labor Productivity
Accounting for Growth of U.S. Real GDP,
(Annual Percentage Changes)
1953 Q2 to
1973 Q4
1973 Q4 to
1995 Q2
1995 Q2 to
2001 Q1
2001 Q1 to
2005 Q3
2005 Q3 to
2011 Q4*
Item
3.6
1.2
2.4
2.8
1.5
1.3
3.8
1.7
2.1
2.8
-0.6
3.4
3.2
0.8
2.4
Increases in Real GDP
Increases in
Quantity of Labor
Increases in
Labor Productivity
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*Beyond 2005 are Projections
Source: Economic Report of the President, 2006

11. Accounting for Growth Technological Advance Quantity of Capital
Infrastructure
Education and Training
Human Capital
Changes in the Educational Attainment of the U.S. Adult Population
Percent of Adult Population
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Source: U.S. Census Bureau
Year

12. Accounting for Growth Economies of Scale Improved Resource Allocation
Other Factors
Economic Freedom
Political Freedom
“Growth Friendly”
Positive Attitudes Toward Work and Risk Taking
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13. A New Economy? Productivity Acceleration 1.4% Average Growth 1973-1995
Reasons for Acceleration
The Microchip and Information Technology
New Firms and Increasing Returns
Start-Up Firms
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14. A New Economy? Increasing Returns Global Competition
More Specialized Inputs
Spreading of Development Costs
Simultaneous Consumption
Network Effects
Learning by Doing
Global Competition
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15. A New Economy? Implication: More Rapid Growth
Skepticism About Permanence
What Can We Conclude?
More Rapid Long-Run Trend of Productivity Growth
Time Will Tell If Growth is Sustainable
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16. A New Economy? Growth Competitiveness Index Finland United States
GLOBAL PERSPECTIVE
Growth Competitiveness Index
Country
Ranking
Finland
United States
Sweden
Denmark
Taiwan
Singapore
Iceland
Switzerland
Norway
Australia 1 2 3 4 5 6 7 8 9 10
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Source: World Economic Forum

17. Growth Desirability Is Growth Desirable and Sustainable?
The Antigrowth View
Adverse Spillovers
Alternative Quality of Life Opinions
In Defense of Economic Growth
Higher Standard of Living
Poverty Reduction
Limited Only by Human Imagination
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