Introductory Macroeconomics: Economic Growth Concepts

A set of vocabulary flashcards based on the key concepts from the lecture notes on economic growth in macroeconomics.

Real GDP per capita

Measures the total value of an economy's production per person, excluding the effects of price increases.

Productivity

The efficiency of production, typically measured as the amount of output per worker.

Convergence Hypothesis

The theory that poorer economies will tend to grow at faster rates than richer ones, leading to a gradual narrowing of income differences.

Total Factor Productivity (TFP)

A measure that captures the efficiency with which capital and labor are used to produce output, reflecting technological progress.

Marginal Product of Capital (MPK)

The additional output produced by using one more unit of capital, holding other factors constant.

Natural Resources

Resources in the environment that can be utilized for production or economic gain, such as land, minerals, and oil.

Diminishing Returns

The principle that as more of a variable input is added to a fixed input, the additional output produced will eventually decrease.

Research and Development (R&D)

Investment in innovation aimed at creating new technologies and products, critical for long-term economic growth.

Economic Institutions

Established laws, regulations, and practices that shape economic behavior and influence growth.

Neo-Malthusian Theory

The idea that economic growth may be limited by a lack of resources, echoing Malthus's concerns about population growth exceeding food production.