ECON 2020U Study Guide - Final Guide: Brookings Institution, Physical Capital, Growth Accounting

• School: UOIT
• Department: Economics
• Course: ECON 2020U
• Professor: Ashfakuddin Rubel

Document Summary

Real gdp per capita (real gdp divided by the population size) is the key statistic. Even small differences in growth rates get magnified over time. Example: if real gdp per capita is growing at an annual growth rate of 3. 5%, it will double in: Labor productivity (often referred to simply as productivity): output per worker. Physical capital: human-made resources, such as buildings and machines. Human capital: the improvement in labor created by the education and knowledge embodied in the workforce. Technological progress: an advance in the technical means of the production of goods and services. Aggregate production function: a hypothetical function that shows how productivity (real gdp per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology. For instance, china and india may have a production function like this (brookings. Gdp per worker = t (physical capital per worker)0. 4 (human capital per worker)0. 6.