ECO 108 Week 4 (9/21-9/25/2015)
ECO 108 Week 4 (9/21-9/25/2015) ECO 108
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This 5 page Class Notes was uploaded by Jade Miller on Monday September 21, 2015. The Class Notes belongs to ECO 108 at University of Rochester taught by Rizzo in Fall 2015. Since its upload, it has received 695 views. For similar materials see Principles of Economics in Economcs at University of Rochester.
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Eugh...this class is soo hard! I'm so glad that you'll be posting notes this semester.
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Date Created: 09/21/15
Econ 108 Notes Day 9 9222015 What did we have in the beginning We were miserably poor for the longest time Income that we made was less than a dollar per day What we earned slowly grew up until the dawn of the Industrial Revolution If we look at incomes around the world today the average is about 10000 a year We are able to produce a lot more stuff today than in the past We re not just getting rich we re getting ridiculously rich True of any economical group So when will the next revolution be Mass production of labor allows for the fastest way to make money What could possible make you work faster to produce more Most of what we rely on is human related Labor vs Machines 30 of what we make comes from factoriesmachines The next revolution should happen in about 2040 World growth SHOULD accelerate to the next generation By 2045 the world per capita income will increase by 14 Extensive Growth To the extent that as we as a population increase output we are not increasing work This is because there are more people around Intensive Growth The growth that we receive today This is not due to an increase in people We are more productive allowing us to produce more each year The environment today is a lot cleaner than in the past contrary to belief People worry about population but there are fewer lives that live in a worse equal society as our ancestors as before We have the ability to live comfortably Years of life clean water clean air ways to communicate list goes on The UN estimates that the population will peak somewhere between 9 and 11 billion There is no runaway population growth but also no runaway oil consumption Are the two correlated Though experiment The economic problem is quite different CONCLUSION We were poor now we re not There are vast amounts of inequality within economic growth The best way to get rich produce something that hasn t been produced before Does this make others poorer Economics 108 Day 10 Wednesday September 23 2015 REVIEW everyone around the world is becoming wealthy there are plenty earning less than 2 dollars a day BUT there is a decrease in the share of people who are poor half the world s population fell in the lowest category for world income distribution An important part of economics is that there are economic systems that punish bad people If we look inside systems we can nd out if systems help those around us The only way to make pro t is to sell for more than what the cost was to make the product Once the product is made it s easy to replicate It can cost billions to invent but to replicate it can cost only pennies After it s discovered it loses value becomes costless Takeaway A lot of modern economics looks like this So how do you award reproducers in the rst place Since 1970 The wage gap between the poorest and the richest has decreased If we look at the numbers 80 reduction in extreme poverty in the last 40 years The rates are dropping so greatly that the lines representing these numbers become almost negligible or nonexistent Does this mean that the end of extreme poverty is nigh The share of people living in absolute poverty is below 8 of world population Is the MiddleClass being hallowed out Are well paying middleincome jobs disappearing Everywhere in the population is richer today then they were in years past Answer YES The people getting rich the fastest is the global middle class BUT has the global economy hallowed out POVERTY IS NOT THE SAME AS INEQUALITY The American lowest 20 stands at 85th percentile of globe China can represent global income distribution well Income Inequality or Poverty Average South Korean leaves 26 years longer and earns 15x as much income as they did only 50 years ago Average Mexican lives longer than the average English did 50 years ago Infant mortality in Nepal is lower than it was in Italy 50 years ago What is the right kind of inequality to focus on FUNCTIONAL inequality Gates has a 10000 Rolex I have a 10 Timex Yet we both have watches with the same purpose Height and Health CrossCountry versus Within Country Intelligence Maybe Entrepreneurial RiskTaking How many people are materially deprived THIS represents inequality Focus on the comparison between the two Remember The eXperience of poorer peasants in history to no Inadequate sanitation and water At best had private privies but still drank from the same streams animals bathed and defecated in and often ones other humans defecated in It took them miles and hours PER DAY to collect water Inadequate fuel sources Really only had wood forests in preindustrial times were devastated before the discovery of coal and then fossil fuels Miles and hours PER DAY to collect as well Inadequate housing Econ 108 Day 11 Notes Wednesday September 27 2015 The Experience of Early Urbanities 18201900 Disease Medicine Refrigeration This is really under appreciated Without it we would easily get diseases ie malaria Cleanliness of Clothes Detergents are really a 20th Century invention Cleanliness of Bodies Equally as unclean as clothes Filthy Streets Doubled as bathrooms for animals AND humans Chamber pots were used then tossed out the window VERY unsanitary Think about the products that we take for granted how they didn t eXist Every piece of data is an understatement of how good things have gone for us The productivity wherever you may be in any sense of the word will skyrocket before there is a wage increase That wage increase may not happen for another 4080 years So what did the world look like in the early 1900s There were constant threats with no known treatments or cures The biggest achievement of the l920th century was the cure of small pox The most infectious diseases today happen from ies They touch poop then y and touch food we eat in an outside environment Health Trends Life EXpectancy in Years Country 1750 1900 1950 1990 2010est UK 37 48 69 76 794 FRANCE 26 46 67 77 807 USA 51 48 68 76 782 INDIA 27 39 59 647 WORLD 25 est 300 500 650 672 Every year that we are alive the average life eXpectancy increases by 1312 A child born today has a 30 chance of living to the age of 100 A current 80 year old has a 77 chance of living until the age of 10 huntergatherers at age 30 have the same probability of death as presentday Japanese at the age of 72 Think about medically counted conditions in 1910 you could have 67 chronic conditions by the time you were 65 Americans today spend less time dying than they did 100 years ago So what about cancer There has been a slow and steady decline The probability of getting cancer is greater at the older ages than when you re younger Cancer is less of a threat today than it was in the past Do we care about this Murphy and Topel Value of health improvements worth approximately 60 of GDP per year from mortality declines alone approximately 10 trillion per year Lictenberg Pharma innovation is responsible for almost 75 of increase in life expectancy for 20002009 125 are the terms of people and pro ts mutually exclusive How much value would you get for certain diseases Look at how much damage has happened from Heart Disease If we eliminate immediately our GDP would triple In conclusion The American Living Standards over the past 100 Years Labor Market We have a workweek and vacation time There is household labor and commutes to make to a job Retirement is a common privilege Didn t exist as a concept for a while because you didn t live to retire 3 million were getting social security and now that number is 38 million Women issues All concentrated in textiles and teaching They now make up 50 of the workforce The wage inequality is still existent even with all the work put in 17 l 8 statistic colleges show women earning more when coming out of college They are actually dominating men at school now Household Amenities No one had them back then but everyone has them now 3 of homes had electricity in the past now 99 of homes have it Health Phrase 1 love Cancer BUT let s look at the economic case for this concept Look at what has killed us death rate was 2200 100000 The death rate NOW is less than a third of what it used to be The top things that kill us are actually less healthy than what was killing us years ago Human Capital Much better educated today than they were 100 years ago 7 of Americans completed high school in 1800 now that number is over 80 Income We will revisit this topic next week
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