1. Copyright ©2001, South-Western College Publishing Contemporary Economics: An Applications Approach By Robert J. Carbaugh 1st Edition Chapter 10: Gross Domestic Product and Economic Growth

2. Carbaugh, Chap. 10 2 International comparisons of GDP Gross Domestic Product GDP Nation(billions)per person* United States$7,690$28,740 Germany2,32021,300 Japan4,72223,400 Canada58421,860 Australia38020,170 United Kingdom1,22020,520 France1,52621,860 Mexico3498,120 Malaysia9810,920 India3741,650 * measured at purchasing power parity Some international comparisons of GDP, 1997 GDP = C + I + G + (X - M) Gross Domestic Product = Personal consumption (C) + Gross private domestic investment (I) + Government purchases of goods and services (G) + Net exports (exports - imports) [X-M]

3. Carbaugh, Chap. 10 3 Components of US GDP, 1998 Gross Domestic Product AmountPercent Component of GDP (billions) of total Disposition of household income$5,807.968% Durable goods724.7 Non-durable goods1,662.4 Services3,420.8 Gross private domestic investment1,367.116% Fixed investment (plant, equipment)1,307.8 Business inventories59.3 Government purchases of goods and services1,487.217% Federal520.6 State and local966.6 Net exports of goods and services-151.2-1% Exports959.0 Imports-1,110.2 Gross Domestic Product8,511.0100

4. Carbaugh, Chap. 10 4 Nominal GDP, real GDP, and deflator Gross Domestic Product Nominal GDPReal GDPGDP deflator Year(billions)(billions)(1992=100) 1985$4,180.7$5,329.578.4 19864,422.25489.980.6 19874696.35648.483.1 19885049.65862.986.1 19895438.76060.489.7 19905743.86138.793.6 19915916.76079.097.3 19926244.46244.4100.0 19936553.06386.4102.6 19946935.76698.7103.5 19957253.86742.9107.6 19967636.06928.4110.2 19978110.97269.8111.6 19988511.07551.9112.7 Nominal and real GDP, 1985-1998

5. Carbaugh, Chap. 10 5 Economic growth Gross Domestic Product SourcesAverage annual of growthpercentage rates Capital growth0.56 Labor growth1.34 Technological progress1.02 Growth in output2.92 Sources of US economic growth, 1929-1982

6. Carbaugh, Chap. 10 6 Productivity slowdown Economic Growth Labor productivityReal hourly earnings Yeargrowth rategrowth rate 1960s (avg.)3.2%2.9% 1970s (avg.)1.81.3 1980s (avg.)1.20.2 19900.80.3 19910.60.6 19923.42.1 19930.2-0.5 19940.5-0.6 19950.10.3 19962.00.5 19971.91.5 Annual rates of growth in US labor productivity and real hourly earnings 1960-1995 Source: US Dept. of Commerce, Bureau of the Census, Statistical Abstract of the US, 1998

7. Carbaugh, Chap. 10 7 Research & Development Expenditures as a share of GDP, 1996 Economic Growth: Role of Government

8. Carbaugh, Chap. 10 8 Impact of education, trade and infrastructure Economic Growth: Role of Government Growth of GDP per Capita (percent per year) Impact of education, openness to trade, and telecommunications infrastructure on economic growth in seventy-four countries, 1965-95 Source: World Bank, World Development Report, 1999

9. Carbaugh, Chap. 10 9 East Asian economies' growth rates Economic Growth GDP per capita*GDP growthannual average % (1997 dollars)1980-901990-97 Hong Kong24,5406.9%5.3% Singapore29,0006.68.5 South Korea13,5009.57.2 Malaysia10,9205.28.7 Thailand6,5907.67.5 Indonesia3,4506.17.5 China3,57010.211.9 Philippines3,6701.03.3 Rich industrial countries21,0913.22.1 * at purchasing power parity Source: World Bank, World Development Report 1998/99