1. The Economic Development of the Global Main Economies US, EU, Japan, and China Together Account for 70% of the Global Economy

2. The Importance of Productivity and National Saving Lecture #1

3. All Economic Activity is Devoted to Two Things --

5. This is in fact what we mean by standard of living

6. Government Can Sometimes be Useful in Helping Us Accomplish These Goals

7. as well as

8. Government Can Sometimes be Useful in Helping Us Accomplish These Goals Helping to Control Externalities, Provide a System of Justice and Enforcement of Contracts, Supply Goods and Services which the Private Market Fails to Provide, Ensure a Reasonable Distribution of Income and Wealth, and Moderate the Business Cycle

10. U = utility C = consumption L = leisure Both C and L ultimately depend on y = output per population

11. We Must Increase y Steadily Over the Long Run

12. How Can We Increase (r1) (r2) and (r3) ?

13. Suppose we just want to increase (r1) which is

14. Child Labor – Not Really Elderly Workers – Limited at Best

15. Foreign Workers – Maybe, but Problems, Problems Robot Workers – Not for Many Years

16. < 1 No Matter What, (r1) has an Upper Limit

17. Okay …..suppose we try instead to increase (r2) which is

18. No Sleeping ---- No Eating ---

19. Just Work, Work, Work ---

20. < 24 Hours/Day No Matter What, (r2) has an Upper Limit

21. In Fact…the Trend is for Less Hours Not More Hours of Work !

22. US Data

25. How Can We Increase y? The Only Reliable, Long Run Way is to Increase (r3) = Average Labor Productivity

27. How Do We Get High Long Run Growth in Labor Productivity?

28. Saving Necessary for Productivity Growth How Do We Get High Long Run Growth in Labor Productivity?

29. Saving Necessary for Productivity Growth 1.Creation of Physical Capital – Tools, Machines, Plant, Equipment 2.Creation and Improvement of Human Capital and Skills 3.Creation and Improvement in Technology and Production Advances 4.Creation and Expansion of New Markets for Goods and Services 5.Development of New and Better Industries 6.Development of Financial and Capital Markets 7.Creation of Inventions, New products, and Innovations

33. We can also Increase Output per person with More Land and Raw Materials

34. Terracing Can Give Us More Land – But Ultimately Limited

35. Parts of the Zuider Zee in the Netherlands as Reclaimed Land from the Ocean – Really Difficult and Costly Noordoostpolder, Netherlands

36. Hong Kong Airport – Land Reclaimed from the Ocean

37. Not Land, but Space, Coupled with Physical Capital

38. Recycling Can Help Us Reduce Some Resource Problems

39. Renewable Energy Can Help a Little in Our Search for Energy

40. Ultimately, all our efforts will require saving as a temporary sacrifice -- in order to grow the economy. This is what we must prepare for and why the challenges in the future are so daunting to the world economy.

41. 1. How Can We Encourage Capital Formation and Capital Usage? 2. Why Does the US Save Very Little? 3. What Factors Determine the Successful Growth of an Economy? 4. Why is Productivity Growth So Difficult to Understand? 5. How Can We Encourage an Increase in National Saving? 6. Does Sustained Growth in Productivity Need Freedom and Democracy? Basic Questions to be Discussed in Afternoon

42. Video of Robert Barro in South Korea Discussing Economic Growth Does Education Really Matter for Growth…..?