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Файл:Economics in Construction. Учебное пособие
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11. Make up your own sentences using the words in bold.
12. Discuss the following:
1. What
2. Any company should pay more attention to their employees,
especially to those who go working abroad.
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U N I T 4
NEW GROWTH THEORY
The new growth theory is an
economic growth theory that posits
humans' desires and unlimited wants
foster ever-increasing productivity and
economic growth. The new growth
theory argues that real GDP per person will perpetually increase because of
people's pursuit of profits. As competition lowers the profit in one area, people
have to constantly seek better ways to do things or invent new products in order
to garner a higher profit. This main idea is one of the central tenets of the theory.
Breaking down new growth theory
The theory also argues that innovation and new technologies do not occur
simply by random chance. Rather, it depends on the number of people seeking
out new innovations or technologies and how hard they are looking for them. In
addition, people also have control over their knowledge capital (i.e., what to
study, how hard to study, etc.). If the profit incentive is great enough, people
will choose to grow human capital and look harder for new innovations.
A significant aspect of the new growth theory is the concept that
knowledge is treated as an asset for growth that is not subject to the finite
restrictions or diminishing returns like other assets such as capital or real estate.
In particular, knowledge is an intangible quality, rather than physical, and can be
a resource grown within an organization or industry.
Under the new growth theory, nurturing innovation internally is one of the
reasons for organizations to invest in human capital. By creating opportunities
and making resources available within an organization, the expectation is
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that individuals will be encouraged to develop new concepts and technology for
the consumer market.
For example, a large enterprise might allow part of its staff to work on
independent, internal projects that might develop into new innovations or
companies. In some ways, the enterprise lets them function like start-ups being
incubated inside the organization. The desire of the employees to launch a new
innovation is spurred by the possibility of generating more profits for
themselves and the enterprise.
This can be especially true in the United States, as commerce is
increasingly driven by service-type companies. Software and app development
may take place within companies, following the new growth theory. Achieving
such knowledge-driven growth requires a sustained investment in human capital.
This can create an environment for skilled professionals to have an opportunity
to not only fulfil their primary jobs but also explore the creation of new services
that can be of benefit and use to the broader public.
Source: Dipankar Dasgupta, Modern Growth Theory/ Oxford UP, 2010
VOCABULARY
perpetually ,
long-run
to meet requirements
people's pursuit of profits
aggregate demand
to garner
tenets
gross profit
by random chance
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restrictions
incentive
to diminish , ,
to appreciate ,
an intangible quality
debt
the consumer market
loss ,
the theory of hysteresis .
to launch a new innovation
knowledge-driven growth
1. Give Russian equivalents to the following word combinations:
Economic growth; humans' desires; ever-increasing productivity; seek
better ways; in order to garner a higher profit; random chance; control over their
knowledge capital; to grow human capital; to develop new concepts; new
innovations or companies; to launch a new innovation; a sustained investment in
human capital; to create an environment for; to fulfil their primary jobs; to
explore the creation of new services; to have an opportunity to.
2. Find in the text and give English equivalents to the following
word combinations:
C
34
3. Translate words and word combinations in bold:
1. Новая теория роста утверждает, что real GDP per person will
perpetually increase because of people's pursuit of profits.
2. It depends on the number of people ищущих новые инновации
или технологии, and how hard they are looking for them.
3. Growth theory is based on supply-side factors such as: factor
inputs, производительность труда, size of the workforce.
4. If savings is too high it приводит к снижению роста because
people cannot afford to consume.
5. Knowledge is an intangible quality, rather than physical, and
может быть ресурсом grown within an organization or industry.
6. Though most growth theories ignore the role of aggregate demand,
some economists argue recessions can cause hysteresis effects and снижение
долгосрочного экономического роста.
7. Different models of economic growth stress альтернативные
причины of economic growth.
8. Achieving such knowledge-driven growth requires устойчивых
инвестиций in human capital.
9. Some growth theories place a large emphasis увеличению
внутренних сбережений.
10. Increasing labour productivity не ведет к снижению отдачи, but,
may have increasing returns.
11. Increasing returns to scale e.g. specialisation we see in
современных заводах and the economies of scale of increased production.
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12. The desire of the employees to launch a new innovation is spurred
by возможностью получения большей прибыли for themselves and the
enterprise.
4. Translate into English:
1.
2.
.
3.
4.
-
5.
6.
7.
8.
9.
10.
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1. long-term
a. a crucial factor in production performance of firms
and nations
2. growth rate
b. holding an asset for an extended period of time
3. productivity
c. the percentage change of a specific variable within a
specific time period, given a certain context
4. the new growth
theory
d. the difference between revenue and the cost of making
a product
5. debt
e. the conceptual time period in which there are no fixed
factors of production
6. long-run
f. a different payment, or series of payments, that is
owed in the future
7. related to
g. the amount of something that firms, producers,
labourers, providers of financial assets
8. gross profit
h. the total amount of goods and services demanded in
the economy at a given overall price level at a given
time
9. demand
aggregate
i. an economic growth theory that posits humans' desires
and unlimited wants foster ever-increasing productivity
them:
5. Answer the questions to the text:
1. What is the New Growth Theory?
2. What will people do if the profit incentive is great enough?
3. What is a significant aspect of the new growth theory?
4. Whom does the enterprise let function like start-ups?
5. What does require a sustained investment in human capital?
6. Match the words or phrases with their definitions and translate
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7. Discuss the following:
1. How the New Growth Theory Values Knowledge and Innovation.
8. Complete the sentences:
1.
2.
3.
4. the concept that knowledge is treated as an asset for growth.
5.
opportunity to not only fulfil their primary jobs but also explore the creation of
new services.
6. Knowledge is an intangible quality, rather than physical, and can
9. Translate the text in a written form:
Readers Question: undertake an evaluation of what governments can learn
from economic theory about raising their economies long-term growth rate?
The long-term growth rate depends upon the underlying trend rate of
economic growth rate. This underlying trend rate of growth depends primarily
on the growth of aggregate supply and productivity.
To increase the long-term growth rate, Aggregate Demand plays a very
limited role. In the Classical model of economic growth, an increase in AD
would only cause inflation. However, you could argue that AD does have a role
to play.
If an economy experiences a recession for a long time, the average long-
run growth rate will be lower. This is related to the theory of hysteresis. What
has happened in the past is likely to happen in the future. Thus, if governments
can manage aggregate demand, they can prevent recessions and help increase
the average growth rate.
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10. Put questions to the words in bold and answer them
11. Make up your own sentences using the words in bold.
12. Discuss the following:
1. An increase in proportion of GDP that is invested however, this is
limited as higher proportion of investment leads to diminishing returns and
convergence on the steady-state of growth
2. Technological progress which increases productivity of
capital/labour
39
U N I T 5
GAME THEORY
Game theory is a branch of applied
mathematics that studies strategic
situations where players choose different
actions in an attempt to maximize their
returns. First developed as a tool for
understanding economic behaviour, game
theory is now used in many diverse academic fields, ranging from biology to
philosophy. Game theory saw substantial growth and its first formalization by
John von Neumann before and during the Cold War, mainly due to its
application to military strategy, most notably to the concept of mutual assured
destruction. Beginning in the 1970s, game theory has been applied to animal
behaviour, including species' development by natural selection. Because of
interesting games like the prisoner's dilemma, in which mutual self-interest hurts
everyone, game theory has been used in political science, ethics and philosophy.
Finally, game theory has recently drawn attention from computer scientists
because of its use in artificial intelligence and cybernetics.
In addition to its academic interest, game theory has received attention in
popular culture. A Nobel Prize-winning game theorist, John Nash was the
subject of the 1998 biography by Sylvia Nasar and the 2001 film A Beautiful
Mind. Several game shows have adopted game theoretic situations, including
Although similar to decision theory, game theory studies decisions that
are made in an environment where various players interact. In other words,
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