ECO 1102 Lecture Notes - Lecture 10: Production Function, Human Capital, Foreign Direct Investment
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Document Summary
When they talk about growth, we"re talking about economic growth and not population growth. We need to talk about productivity and policies. Remember there is not a one size fits all policy. Productivity: average quantity of goods and services produced per hour of a worker"s time. This drives growth and when workers are productive his leads to large economic growth and high income. This is correlated with an increase in living standards as well. Remember that these can be imported, you do not need them in your geographical boundary: technological improvements (a): new ideas, products and processes for producing goods and services. (e. g. slide 16). It refers to society"s understanding of how to best produce these goods and services. For example, some may be common knowledge, while others may be proprietary such as being a kept secret or patent. Remember that output depends on the factors of production. If technology increases, we can create more output at the same cost.