The Nature of Economic Growth
Benefits of Economic Growth
- Rising average living standards
- Addressing poverty and income inequality
Costs of Economic Growth
- Environmental damage
- Cost of forgone consumption
Sources of Economic Growth
- Growth in labour force
- Growth in human capital
- Growth in physical capital
- Technological improvement
A Long-Run Analysis
A recap to Chapter 6:
$$
Y = C + I
$$
Y ⇒ equilibrium level of real GDP
C ⇒ desired consumption