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Definition: Economic growth is the increase in the standard of living over time
The standard of living is measured as GDP per capita
Other indicators: longevity; average height; transportation
Most growth since 5000 BC has taken place in the past few hundred years
Bags of flour example: in 1500, it took 3 days of work to produce the equivalent of one 5-pound bag of flour. In the U.S. today, we produce the equivalent of 400-450 5-pound bags with 3 days of work
Growth is a compounding process. The rule of 72 can be used to estimate doubling time. If the standard of living increases at x percent per year, then the standard of living will double every 72/x years. At 2 percent per year, standard of living doubles every 36 years.
Growth is due partly to capital accumulation, mostly to recipe (knowledge) accumulation; does not come from rich stealing from poor
Major differences across countries: for example, North Korea is poor, South Korea is rich
No magic formula for lifting underdeveloped countries out of poverty
My view: three ethics of growth--work ethic, public service ethic, learning ethic
We will not run out of resources, including oil
We are not headed toward environmental catastrophe (1970's "limits to growth" discredited)
Current source of growth--Moore's Law
Future growth--computer power, nanotechnology, biotechnology
We will not run out of jobs--but leisure is likely to increase