ECON 201 Lecture Notes - Lecture 4: Diminishing Returns, Physical Capital, Human Capital
Document Summary
The rule of 70 tells how long it takes real gdp per capita, or any other variable that grows gradually over time, to double. Number of years for variable = 70/the annual growth rate of the variable. Labor productivity, often referred to simply as productivity, is output per worker. Physical capital consists of human-made resourced such a buildings and machines. Human capital is the improvement in labor created by the education and knowledge embodied in the workforce. Technology is the technical means for the production of goods and services. The aggregate production function is a hypothetical function that shows productivity. An aggregate production function exhibits diminishing returns to physical capital. A number of factors influence differences among countries in their growth rates. Growth rates of economically advanced countries have converged, but not the growth rates of countries across the world.
