宏观经济学（第十三版）课件：Growth and Policy

GrowthandPolicy

.IntroductionChapter3explainedhowGDPandGDPgrowtharedeterminedbythesavingsrate,rateofpopulationgrowth,andtherateoftechnologicalprogressThequestionanalyzedinthischapteris“Howdosociety’schoicesaffecttheseparameters?”Inmanydevelopedcountries,inventionandadvancesintechnologyarethekeydeterminantsofgrowthTechnologicaladvancesaremuchlessimportantforpoorcountriesmoreimportanttoinvestinhumanandphysicalcapitalandborrowtechnologicaladvancesfromothersEndogenousgrowththeory(Romer,Lucas)explainshowsociety’schoicesleadtotechnologicalprogressandgrowth4-2TroubleWithNeoclassicalGrowthTheoryBythelate1980’stherewasgreatdissatisfactionwithneoclassicalgrowththeorysince:ItdoesnotexplaintheeconomicdeterminantsoftechnologicalprogressItpredictsthateconomicgrowthandsavingsratesareuncorrelatedinthesteadystateEndogenousgrowththeoryemphasizesdifferentgrowthopportunitiesinphysicalandknowledgecapitalDiminishingmarginalreturnstophysicalcapital,butperhapsnotknowledgecapitalTheideathatincreasedinvestmentinhumancapitalincreasesgrowthiskeytolinkinghighersavingsratestohigherequilibriumgrowthrates4-3MechanicsofEndogenousGrowth

4-4Needtomodifytheproductionfunctiontoallowforself-sustaining,endogenousgrowthFigure4-1(a)showstheSolowgrowthdiagram,withthesteadystateatpointCwheresavingsequalsrequiredinvestmentIfsavingsaboverequiredinvestment,economyisgrowingasmorecapitalisaddedprocesscontinuesuntilsavingsequalsrequiredinvestment(reachthesteadystate)MechanicsofEndogenousGrowth

4-5Needtomodifytheproductionfunctiontoallowforself-sustaining,endogenousgrowthFigure4-1(a)showstheSolowgrowthdiagram,withthesteadystateatpointCwheresavingsequalsrequiredinvestmentDuetothediminishingMPK,theproductionfunctionandsavingsfunctionflattenoutandcrosstheupwardslopingrequiredinvestmentlineonceMechanicsofEndogenousGrowth

4-6Needtomodifytheproductionfunctiontoallowforself-sustaining,endogenousgrowthEconomyillustratedinFigure4-1(b)isdescribedbyaproductionfunctionwithaconstantMPK:Y=aK(1)Kistheonlyfactor,aistheMPKProductionfunctionandsavingscurvebecomestraightlines,andarealwaysgreaterthanrequiredinvestmentthehigherthesavingsrate,thebiggerthegapbetweensavingsandrequiredinvestment=fasterthegrowthMechanicsofEndogenousGrowthIfthesavingsrate,s,isconstantandthereisneitherpopulationgrowthnordepreciationofcapital,thenthechangeinthecapitalstockisdefinedas:

(2)

GrowthrateofcapitalisproportionaltothesavingsrateOutputisproportionaltocapital,thusthegrowthrateofoutputis(3)

Thehighers,thehigherthegrowthrateofoutput4-7DeeperEconomicsofEndogenousGrowthEliminatingdiminishingmarginalreturnstocapitalrunsagainstprevailingmicroeconomicprinciplesIfthereareconstantreturnstocapitalalone,therewillbeincreasingreturnstoscaletoallfactorstakentogetherlargerandlargerfirmsbecomeincreasinglyefficient,andshouldseeasinglefirmdominatetheentireeconomyNotrealistic,soneedtoeliminatethepossibilityofincreasingreturnstoscaletoallfactors,andconstantreturnstoasinglefactor4-8DeeperEconomicsofEndogenousGrowthAlternatively,asinglefirmmaynotcaptureallbenefitsofcapitalsomeexternaltothefirm(Romer)WhenafirmincreasesK,firm’sproductionincreases,butsodoestheproductivityofotherfirmsAslongasprivatereturnhasconstantreturnstoallfactors,therewillbenotendencytowardsmonopolization4-9Privatevs.SocialReturnstoCapitalInvestmentproducesnotonlynewmachines,butalsonewwaysofdoingthingsFirmsDOcapturetheproductionbenefitsofanewmachine(PRIVATERETURNS)FirmsmayNOTcapturethebenefitsofnewtechnologiesandideas,sincetheyareeasytocopy(SOCIALRETURNS)EndogenousgrowththeoryhingesonthenotionthattherearesubstantialexternalreturnstocapitalNotrealisticforphysicalcapital,butquiteforhumancapital:ContributionofnewknowledgeonlypartiallycapturedbycreatorFromonenewideaspringsanotherknowledgecangrowindefinitely4-10NandtheEndogenousGrowthModelAssume:Technologyisproportionaltothelevelofcapitalperworker,or

2.Technologyislaboraugmenting,3.Technologygrowthdependsoncapitalgrowth,orTheGDPgrowthequationfromChapter3wasIf,then4-11NandtheEndogenousGrowthModelSincethenumeratoranddenominatorofy/kgrowatequalrates,y/kisconstantWhatisthatconstant?FindbydividingtheproductionfunctionbyKandsimplifying:

Theequationforcapitalaccumulationcanbewrittenas:Makingthesubstitutionfory/k,thegrowthrateofyandkbecomes:

4-12ConvergenceDoeconomieswithdifferentinitiallevelsofoutputeventuallygrowtoequalstandardsoflivingorconverge?NeoclassicalgrowththeorypredictsabsoluteconvergenceforeconomieswithequalratesofsavingandpopulationgrowthandwithaccesstothesametechnologyshouldallreachthesamesteadystatelevelofincomeConditionalconvergenceispredictedforeconomieswithdifferentratesofsavingsand/orpopulationgrowthsteadystatelevelofincomewilldiffer,butthegrowthrateswilleventuallyconvergeEndogenousgrowththeorypredictsthatahighsavingsrateleadstoahighgrowthrate4-13ConvergenceDoeconomieswithdifferentinitiallevelsofoutputeventuallygrowtoequalstandardsoflivingorconverge?RobertBarrotestedthesecompetingtheories,andfoundthat:CountrieswithhigherlevelsofinvestmenttendtogrowfasterTheimpactofhigherinvestmentongrowthishowevertransitoryCountrieswithhigherinvestmentwillendinasteadystatewithhigherpercapitaincome,butnotwithahighergrowthrateCountriesdoappeartoconvergeconditionally,andthusendogenousgrowththeoryisnotveryusefulforexplaininginternationaldifferencesingrowthrates4-14GrowthTrapsandTwoSectorModelsHowdoweexplainaworldwithBOTHnogrowthANDhighgrowthcountries?Ghanaisanexampleofaneconomythathasexperiencednogrowthsince1900ChinaisanexampleofaneconomythathasexperiencedrapidgrowthinrecentyearsNeedamodelinwhichthereisapossibilityofbothanogrowth,lowincomeequilibriumANDahighgrowth,highincomeequilibrium

Elementsofbothneoclassicalandendogenousgrowththeories4-15GrowthTrapsandTwo-SectorModels

4-16Supposetherearetwotypesofinvestmentopportunities:ThosewithdiminishingMPKatlowincomelevelsThosewithconstantMPKathighincomelevelsFigure4-2illustratessuchasituationTheproductionfunctionhasacurvedsegmentatlowlevelsofincomeandanupwardslopinglineathighlevelsPointAisaneoclassicalsteadystateequilibrium,whilepastpointBthereisongoinggrowth(endogenousgrowththeory)GrowthTrapsandTwo-SectorModels

4-17Supposetherearetwotypesofinvestmentopportunities:ThosewithdiminishingMPKatlowincomelevelsThosewithconstantMPKathighincomelevelsWithtwooutletsforinvestment,societymustchoosenotonlytotalinvestment,butalsothedivisionbetweenthetwoSocietiesthatdirectItowardsresearchanddevelopmentwillhaveongoinggrowthSocietiesthatdirectItowardphysicalcapitalmayhavehigheroutputintheshortrunattheexpenseoflowerlongrungrowthSolowModelwithEndogenousPopulationGrowthOneoftheoldestideasineconomicsisthatpopulationgrowthworksagainsttheachievementofhighincomeTheSolowgrowthmodelpredictsthathighpopulationgrowth,n,meanslowersteadystateincomeaseachworkerwillhavelesscapitaltoworkwithOverawiderangeofincomes,populationgrowthitselfdependsonincome,n(y)Verypoorcountrieshavehighbirthratesandhighdeathrates,resultinginmoderatelyhighpopulationgrowthAsincomerises,deathratesfallandpopulationgrowthincreasesAtveryhighincomes,birthratesfall,someevenapproachingzeropopulationgrowth(ZPG)4-18SolowModelwithEndogenousPopulationGrowth

4-19Figure4-3illustratesthemodifiedinvestmentrequirementlineontheSolowdiagramtoaccountfornasafunctionofyTheinvestmentrequirementline,[n(y)+d]k,risesslowlyatlowlevelsofincome,thensharplyathigherlevels,andfinallylevelsoffathighlevelsofincomeSolowModelwithEndogenousPopulationGrowth

4-20TheinvestmentrequirementlinecrossesthesavingscurveatpointsA,B,andCPointAisapovertytrapwithhighpopulationgrowthandlowincomesPointChaslowpopulationgrowthathighincomesPointsAandCarestableequilibriumsbecausetheeconomymovestowardsthesepointsPointBisanunstableequilibriumsincetheeconomymovesawayfromitSolowModelwithEndogenousPopulationGrowth

4-21Howcananeconomyescapefromthelow-levelequilibrium?Therearetwopossibilities.Ifacountrycanputona“bigpush”thatincreasesincomepastpointB,theeconomywillcontinueunaidedtothehigh-levelatpointCAnationcaneffectivelyeliminatethelow-leveltrapbymovingthesavingscurveuportheinvestmentrequirementlinedownsothattheynolongertouchatpointsAorB

raisingproductivityorincreasingthesavingsrateraisesthesavingsline populationcontrolpolicieslowertheinvestmentrequirementlineSolowModelwithEndogenousPopulationGrowth

4-22Howcananeconomyescapefromt