14 - Economic Growth

Rule of 70 - Utilizada para descobrir em quantos anos, dado uma certa taxa de crescimento constante, o GDP dobre (aumente em 100%)
Yrs = 70 / Tx.de.crescimento

Sources de um Economic Growth
- Land
- Labor
- Capital gods
- Entrepreneurial ability (how to combine the 3 keys above)

Precondition for Economic Growth
3 social institutions that incentives people to produce on sectors which they have some advantage.
- Market
- Properties Right
- Exchange rate

Productivity Curve (Labor Productivity X Capital labor/hour)
2 factors that contribute to the growth of Labor Productivity
- Physical Capital per labor/hour
- Technology

One-Third Rule states that at certain Technology level, an increase of 1% on the Capital increases the Labor Productivity on 1%/3.

Persistent Economic Growth
- Savings and Investing in new capital
- Investing in Human Capital (knowledge)
- Discovery of New technology (making physical capital and human capital more productive)

Growth Theory
Classical - Growth is temporary. Population Explosion. Subsistence Level.
Neoclassical - Population growth independent of Economic growth. You only have economic growth with technology. Change technology lead more savings and investment which increase capital per labor/hour. Growth stops at Target rate of Return (Derivada da curva)
New Theory - Growth increase with technology without barriers. People always search for profit.