CONCLUSION THE IMPORTANCE OF LONG RUN GROWTH
In this chapter, we have discussed what determines the standard of living in a nation and how policymakers can endeavor to raise the standard of living through policies that promote economic growth. Most of this chapter is summarized in one of the Ten Principles of Economics: A country’s standard of living depends on its ability to produce goods and services. Policymakers who want to encourage growth in standards of living must aim to increase their nation’s productive ability by encouraging rapid accumulation of the factors of production and ensuring that these factors are employed as effectively as possible Economists differ in their views of the role of government in promoting economic growth At the very least, government can lend support to the invisible hand by maintaining property rights and political stability More controversial is whether government should target and subsidize specific industries that might be especially important for technological progress. There is no doubt that these issues are among the most important in economics. The success of one generation’s policymakers in learning and heeding the fundamental lessons about economic growth determines what kind of world the next generation will inherit.