ECON 20B Lecture 14: Economic Growth (cont.)
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Econ 20b - lecture 13 - economic growth (cont. ) Expansion of human capital and discovery of new technologies. Human capital the accumulated skill and knowledge of people comes from three sources: Expansion of human capital and the discovery of new technologies has increased labor productivity. The discovery of new technologies have made an even greater contribution to economics growth than the growth of human capital. To reap the benefits of technological change, capital must increase. Some of the most powerful technologies are embodied in human capital, but most technologies are embodied in physical capital. Real gdp grows because labor becomes more productive and also because then quantity of labor increases. Real gdp growth depends on quantity of labor growth and on labor productivity growth. Classical growth theory - the theory that the clash between an exploding population and limited resources will eventually bring economic growth to an end.
