ECON 105 Lecture Notes - Lecture 7: Capital Accumulation, Opportunity Cost, Intellectual Property

• School: Simon Fraser University
• Department: Economics
• Course: ECON 105
• Professor: Brian Krauth

Document Summary

Typical estimate: 1 year in school = 10% increase in a workers productivity or wage. Cost of 1 year in school: opportunity cost. There may also be externalities to human capital accumulation. These externalities are the primary argument for government subsidy of education. Health and nutrition can be very important in poor countries r for poor people. Consists of the stock of ideas designs and methods. This is why we don"t divide by l. Once created, technology can be shared at no cost. The private sector will invest in developing new technologies only when they are excludible. (do not allow other firms to copy technology) When technologies are excludible, they will get shared too little. When technologies are not excludible they will not receive enough investment. Intellectual property law that balances need for investment incentives with need for sharing of ideas once created. Government can also invest directly in research. Growth through k, h, or a requires investments.