output gap in economics

In this lecture we will focus on Long Run
Economic Growth in economies


 In the lecture called “GDP”, we looked at economic
growth, or the change in GDP over a relatively short
period of time, around five years


 In this set of slides, we look at the determinants of
GDP over a longer period of time, 10 to 15 years or
longer




What makes an economy like
Burkina Faso so poor, and an
economy like Belgium so rich?

, The determinants of economic growth:
What do you
Economic growth theory lists three
mean by
determinants which interact to
human capital?
determine economic growth
 Capital Human capital is a measure of the skills,
 Human Capital education, capacity and attributes of
 The Rate of Technological Change labour which influence workers’
productive capacity and earning potentia


What do you
mean by capital? Capital can only produce
wealth if workers are skilled
In economic growth theory, capital is defined as “all those enough to use that capital
man-made goods which are used in further production of efficiently and if workers ar
wealth” able to develop new
technologies
So, for example, if firms have better
telecommunications networks, they
can reach new markets at a lower
cost