The Capitalist Revolution

Flashcards based on the lecture notes about the Capitalist Revolution, covering economic inequality, technological revolution, the role of capitalism, GDP, and alternative measures of well-being.

Gross Domestic Product (GDP)

Measures an economy’s size: the market value of all goods and services produced in a country within a given time period.

GDP per capita

Income per person or GDP / population. Measures average living standards.

Happiness Index

Includes GDP per capita, social support, healthy life expectancy, freedom, generosity, and perceptions of corruption.

Human Development Index (HDI)

A composite statistic used to rank countries based on life expectancy, education, and per capita income indicators.

Growth take-off

Occurred at different points in time for different countries, with Britain being the first to experience it around 1650.

Technology

A process that uses a set of inputs, including materials, machinery, and labor, to produce an output.

Technological Progress

Means less labor is needed to produce the same output.

Capitalism

Characterized by a new combination of institutions built around private property, markets, and firms.

Specialisation

The growth of firms and the expansion of markets allowed for an unprecedented division of labour.

Technology & Capitalism

Firms competing with one another had strong incentives to adopt and develop new and more productive technologies.

Absolute advantage

if the inputs it uses to produce this good are less than in some other person or country.

comparative advantage

in the production of a particular good, if the cost of producing an additional unit of that good relative to the cost of producing another good is lower than another person or country’s cost to produce the same two goods.