Economic Growth

An increase in productive capacity or an outward shift in the production possibilities frontiers (PPF).

Causes of Economic Growth

Capital Accumulation An Increase in the Size of the Labor Force

Population Growth

An Increase in Labor Force Participation

Technological Progress
Neutral Technological Progress

Capital-Saving Technological Progress

Labor-Saving Technological Progress

Types of Economics Growth

Balanced Growth Anti-Trade Biased Growth (Import-Replacing
Growth)

Pro-Trade Biased Growth (Export-Expanding

Growth

To calculate this growth rate, we use the formula:

Growth of real GDP = Real GDP in Real GDP in current year previous year Real GDP in previous year

x 100

Real GDP
Real GDP per person

Real GDP divided by the population. The contribution of real GDP growth to the change in the standard of living depends on the growth rate of real GDP per person.

Labor productivity =

Real GDP Aggregate hours

 Saving and Investment in Physical Capital Saving and investment in physical capital increase the
amount of capital per worker and this can increase labor productivity.

Expansion of Human Capital Human capitalthe accumulated skill and knowledge

of peoplecomes from two sources:

Education and training Job experience

Balanced Growth
A proportional increase in the countrys endowments of factors of production such that the following ratios remain the same:

Capital to labor ratio; Land to labor ratio; and Land to capital ratio.

Effects of Balanced Growth

With constant returns to

scale, as the endowments of factors of production increase proportionally, so do production, consumption and the volume of trade.

Balanced growth
results in neutral production, consumption and the volume-of-trade effects.

Effects of Anti-Trade Biased Growth

If the increase in the

endowments of factors of production is biased toward the importcompeting industry, the countrys ability to make the importable goods grows faster than its ability to make the exportable goods.

Anti-trade biased
growth cuts trade, yet brings gains to the country itself.

Effects of Pro-Trade Biased Growth

If the increase in the

endowments of factors of production is biased toward the exporting industry, the countrys ability to make the exportable goods grows faster than its ability to make the importable goods.

Pro-trade biased growth

(export expanding growth) brings gains to the country by increasing the volume of trade.

Economic Growth of Republic of Kazakhstan

Kazakhstan has rebounded well from the economic recession that affected the country in the first half of 2009. During the crisis, GDP growth rate registered at just 1.2% and the country plunged into recession from the sharp fall of oil and commodity prices. With an estimated growth rate of 7.1% the first half of 2011, this oilproducing country ranks in the top 10 fastest growing countries, according to the International Monetary Fund.

An upper-middle-income country, Kazakhstans per capita GDP was US$ 11,245 in 2011. In the past decade there has been a significant decrease in poverty rates, from 46.7% in 2001 to 6.5% in 2010. The gap between urban and rural living standards still remains - the poverty rate is under 5% in urban areas, while it is about 10% in rural locations. Overall, about 30% of the population receives some sort of social assistance.