EDUCATION

EDUCATION Education-investment in human capital-is at least as important as investment in physical capital for a country’s long-run economic success. In the United States, each year of schooling has historically raised a person’s wage on average by about...

INVESTMENT FROM ABROAD

INVESTMENT FROM ABROAD So far, we have discussed how policies aimed at increasing a country’s saving rate can increase investment and, thereby, long-term economic .growth. Yet saving by domestic residents is not the only way for a country to invest in new...

DIMINISHING RETURNS AND THE CATCH-UP EFFECT

DIMINISHING RETURNS AND THE CATCH-UP EFFECT Suppose that a government pursues policies that raise the nation’s saving rate-the percentage of GDP devoted to saving rather than consumption. What happens? With the nation saving more. fewer resources are needed to...

SAVING AND INVESTMENT

SAVING AND INVESTMENT Because capital is a produced factor of production, a society can change the amount of capital it has. If today the economy produces a large quantity of new capital goods, then tomorrow it will have a larger stock of capital and be able to...

ECONOMIC GROWTH AND PUBLIC POLICY

ECONOMIC GROWTH AND PUBLIC POLICY So far, we have determined that a society’s standard Living depends on its ability to produce goods and services and that its productivity depends on physical capital per worker, human capital per worker, natural resources per...

ARE NATURAL RESOURCES A CIMIT TO GROWTH.

ARE NATURAL RESOURCES A CIMIT TO GROWTH. Today, the world’s population is over 6 trillion, about four times what it was a century ago. At the same time, many people are enjoying a much higher standard of living than did their great-grandparents. A perennial...