Learning Outcome Statements

1. Factors favoring and limiting economic growth in developed and developing economies

a. compare factors favoring and limiting economic growth in developed and developing economies;

2. Why does potential growth matter to investors?

b. describe the relation between the long-run rate of stock market appreciation and the sustainable growth rate of the economy;

c. explain why potential GDP and its growth rate matter for equity and fixed income investors;

3. Production function and growth accounting

d. distinguish between capital deepening investment and technological progress and explain how each affects economic growth and labor productivity;

e. forecast potential GDP based on growth accounting relations;

4. Other inputs of the production function

f. explain how natural resources affect economic growth and evaluate the argument that limited availability of natural resources constrains economic growth;

g. explain how demographics, immigration, and labor force participation affect the rate and sustainability of economic growth;

h. explain how investment in physical capital, human capital, and technological development affects economic growth;

5. Theories of growth

i. compare classical growth theory, neoclassical growth theory, and endogenous growth theory;

j. explain and evaluate convergence hypotheses;

k. describe the economic rationale for governments to provide incentives to private investment in technology and knowledge;

6. Growth in an open economy

l. describe the expected impact of removing trade barriers on capital investment and profits, employment and wages, and growth in the economies involved.