Another "simple" economics question

[ QUOTE ]
Either using a greater quantity of resources or using the same quantity of resources more efficiently or some combination of the 2.

[/ QUOTE ]

I think my first post about the factors of production says it better.

[Darryl_P]

Being of a mindset that the more we produce and consume, the better, and actually doing it.

The main drivers of today's economy are the baby boomers. These people grew up in the aftermath of a major war and so they are well conditioned to building and creating stuff and enjoying the creations.

The next couple of generations OTOH grew up (and are growing up) getting everything spoonfed to them and are being told that building and creating stuff is good. But without first-hand experience from the war aftermath they are asking questions like "is that really the most important"? Many are figuring out ways to get by without working so hard, even if it means consuming less.

This generational mindset change is the biggest threat to the economy IMO. Once the baby boomers retire (next 10-15 years), the major contributing force will become a major depleting force (drawing all those social security pensions which are pay-as-you-go funded), and the ones left holding the bag will be of a less motivated mindset.

Add to all that the huge levels of debt and unbacked paper currency and we're in for big, big trouble in about 10-15 years' time.

I can't prove it of course but this is the scenario I'm running with. Best way to prepare: buy precious metals at a level of at least 10% of net worth. When gold hits $1000 an ounce, don't say I didn't warn you!

[SheetWise]

[ QUOTE ]
What causes economic growth (in the long-term)?


[/ QUOTE ]
Why do poker players multi-table?

[bluesbassman]

[ QUOTE ]
What causes economic growth (in the long-term)?

[/ QUOTE ]

I believe it's increasing per capita production.

[2+2 wannabe]

[ QUOTE ]
[ QUOTE ]
What causes economic growth (in the long-term)?

[/ QUOTE ]

I believe it's increasing per capita production.

[/ QUOTE ]

the Solow model is old-school theory

[tomdemaine]

[ QUOTE ]
What causes economic growth (in the long-term)?

[/ QUOTE ]

exogenous increases in A [img]/images/graemlins/grin.gif[/img]

[lehighguy]

I didn't get to read all of these rediculous responses, but there were some crazy ones.

Productivity increases are the only way to sustain per capita GDP growth. If you can turn one sheet of aluminum into a single piece of aluminum siding in year 1 and turn it into two pieces in year two because of some technological breakthrough then you've increased productivity.

Simple Macroeconomics.

[SheetWise]

[ QUOTE ]
I didn't get to read all of these rediculous responses, but there were some crazy ones.

Productivity increases are the only way to sustain per capita GDP growth. If you can turn one sheet of aluminum into a single piece of aluminum siding in year 1 and turn it into two pieces in year two because of some technological breakthrough then you've increased productivity. Simple Macroeconomics.

[/ QUOTE ]
But the question was "What causes economic growth ..."

If I can sell one sheet of aluminum in year 2 for 5x the price of one sheet in year 1 because of some marketing breakthrough, have I contributed to growth?

How about if I turn sand into processors? (Some people may simply discount it as a change of use).

[lehighguy]

First some backround:
http://www.econlib.org/library/Enc/Productivity.html

Second, productivity statistics are adjusted for inflation. A rise in prices would not result in a rise in productivity.

[SheetWise]

The question was -
[ QUOTE ]
What causes economic growth (in the long-term)?


[/ QUOTE ]
You seem to be focused on productivity.

[ QUOTE ]
Economic Growth. An increase in an economy's ability to produce goods and services which brings about a rise in standards of living.

[/ QUOTE ]
While this includes productivity, it does not exclude non-productive endeavors, "goods and services which brings about a rise in standards of living" may include cinema, sports, art, etc. Selling panties for $200, I would classify as an art. My sister sells water color paintings at her gallery in Manhatten for $3k -- that's an art. Is it a part of economic growth -- yes.