1 / 19

POTENTIAL PRODUCT ECONOMIC GROWTH, SUPPLY SIDE

POTENTIAL PRODUCT ECONOMIC GROWTH, SUPPLY SIDE. Q = f ( L, K, TN) Labor - population Capital – National wealth Technological change. ECONOMIC GROWTH. Economic growth – diferences in the levels of development

jiro
Download Presentation

POTENTIAL PRODUCT ECONOMIC GROWTH, SUPPLY SIDE

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. POTENTIAL PRODUCT ECONOMIC GROWTH, SUPPLY SIDE Q = f ( L, K, TN) Labor - population Capital – Nationalwealth Technologicalchange

  2. ECONOMIC GROWTH Economicgrowth – diferences in thelevelsofdevelopment History – Malthusianviews, thegrowthofpopulation to limitsofresources - land; constantincomes in oldcivilizations; exceptionsChina (950-1250) andEurope (1500-1800) Modern economicgrowth 1800- medium term: thechanges in the K/L ratio; long run: unlimitedbytheamountoflandandnaturalresources Is economicgrowthunlimited? technologicalchange, totalfactorproductivity Simon Kuznetz, Robert Sollow, RES (1957), Edward Prescott, IER (1998) Theindicatorsofeconomicdevelopment

  3. GDP/CAPITA (PPP, 1990)

  4. GDP/CAPITA(in US$, PPPi 1990)

  5. ECONOMIC DEVELOPMENT

  6. METHODS FOR CALCULATING TOTAL FACTORS PRODUCTIVITY Cobb-Douglas productionfunction Q = A KaLbert lnQ = lnA + a*lnK + b*lnL + r*t Q = A KaL(1-a)constantreturns to scale dQ/dt = dA/dt + a*dK/dt +(1-a)*dL/dt rQ = rA + a*rK + (1-a) * rL rA = rQ – a*rK – (1-a) * rL

  7. POPULATIONDEMOGRAPHIC NOTIONS R.T. Malthus: An Essey in thePrincipleofPopulation 1798 Aassumptions, development Naturalmovements: natality, mortalityandgrowth Migrations:immigrations, emigrations, migration saldo Structures:genderand age, activeandnon-active, working, employed, selfemployed Labor supply:demographicand social movements Labor demand: employmentfunctionrL=a + b rQ + c DUM, a – avtonomous, b – elasticity, c - assimetry

  8. POPULATION GROWTHMalthuserror 1800: 7 mil 1825: 14 mil 1850: 28 mil 1900: 112 mil 2000: 1892 mil 30- 20- mortality natality 10- 2000 1800

  9. ACTIVE POPULATION EU272009 EU27 Slovenia Workingpopulation (mill) 214.3 1.0 (1) share 0-14 years 15.7 14.0 (2) share >65 years 17.1 16.4 Old age dependency 100*((1)+(2))/(100-(1)-(2)) 48.7 43.7 Activityrate M 59.4 61.8 Activityrate F 46.1 50.5 Unemploymentrate 8.8 5.6

  10. POPULATION FORECASTS EU Year 2010 2020 2030 2040 2050 millions (1)< 15years 78 79 75 73 73 (2) 15-64 years 334 331 321 307 294 (3) > 65 years 87 103 123 140 148 (4) Totalpopulation 499 513 519 520 515 (2)/(4) activityrate 0.67 0.64 0.61 0.59 0.57 ((1)+(3))/(2) dependencerate 0.49 0.55 0.62 0.69 0.75

  11. SUPPLY AND DEMAND OF LABOR Supplyof Labor: demographicmovements, age structures, migration, skills, priceelasticityofsupply: incomeeffectssubstitutioneffects, wealtheffects; Demandforlabor: employmentfunction Unemployment: open, hidden, classical, cyclical, structural

  12. DEMAND FOR LABOR Labor market “a” “b” “c” consequences traditonal + 0 0 no labor market, highhidden socialism unemployment selfmanaged 0 0.3 - growinghiddenunemployment socialism low open unemployment classical (US) - 1 0 flexiblelabor market capitalism open unemployment traditionalEuropean - 0.5 - lowhiddenunemployment capitalism high social protection neo-evropean - 0.7 + growthof open unemployment capitalism hysteresis rZ- growthofemployment, rQ – growthof GDP, D- dummy, a-autonomousgrowth, b-elasticity, c- assymetry

  13. PRECARIAN EMPLOYMENT Unemployment % EU25 EU15 EU10 9.0 8.0 14.3 Employmenttype % part-time 17.7 19.4 8.0 fordefinite time 13.7 13.6 14.3 self-employed 15.9 14.9 22.0 ∑ 47.3 47.9 44.3

  14. INFLATION Thediminishingpurchasingpowerofmoney, growthofprices; Mesurement: retailsalepricesindex, costoflivingindex Typesofinflation: crawling, slow, fast, hyperinflation; Thecostsofinflation: redistribution, expectedinflation, adaptation to inflation, indexation Inflationarytax: thediminishingvalueofmoney Seignorage: revenuesdue to monopolyofprintingmoney,

  15. GERMAN HYPERINFLATION January 1922 1 1 1 January 1923 16 75 189 March 1923 45 132 -12 May 1923 70 221 157 July 1923 354 2021 386 August 1923 5394 25515 1262 September 227777 645946 2532 October 20201256 191891890 29270

  16. AGGREGATE DEMAND AND SUPPLY Supply:  = e + *(Y-Yr)  = -1 + *(Y-Yr) e – expectedinflation, Yr– equilibriumproduct Demand: Y=Y-1+ *(m - )  = m –1/ *(Y-Yr)  = m –1/ *(Y-Y-1) m - money

  17. DEMAND PULL AND SUPPLY PUSHINFLATION DEMAND PULL AND SUPPLY PUSH INFLATION D D1 Demand Pull Supply Push S D S1 S P1 P1 P P Y Y1 Y Y1

  18. THE EFFECTS OF THE INCREASE IN DEMAND IN DIFFERENT THEORIES DEMAND PULL INFLATION D S D S D C CC S Q QQ neokeynesian classical keynesian

  19. INFLATION IN EU27, EU16 AND SLOVENIA

More Related