economic growth

Benefits and costs of long-term economic growth

Question 1

1. a) What are the main benefits and costs of long-term economic growth? (4 marks)
2. b) According to Neo-classical growth theory, what is the main driver of growth in real incomes per head in the long term? (4 marks)
3. c) What do you understand by the “productivity puzzle”? (4 marks)
4. d) What issues does climate change pose for future growth? (4 Marks)
5. e) What policies might help secure sustainable growth? (4 Marks

Question 2

Some (micro) economists think that macroeconomics is a waste of time and is not built on firm micro foundations. Instead, they think we should study individual products, firms, and industries in a disaggregated approach.

Give your own (critical if necessary) assessment of the potential contribution of macroeconomics to understanding some of the major issues of our time. You can do this in general terms, or you can explain your views in the context of what you have learned about the macroeconomy of any major country that you have studied in this course (or any previous course). (20 marks)