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Chapter 6

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Lecture 6: Sources of Economic Growth and Productivity Increases, emphasis on tech. change 6.1: Productivity and Growth Canadas competitive Roots Productivity and growth closely tied together Economy will grow as more inputs added Most of growth per capita output is result of improvements in technology Without productivity growth, output growth would be slower Aggregate economy must show productivity inprovements for higher standard of living Long run competivieness of Canadian economy depends on ability to increase productivity Competitiveness is ability to sell products in particular markets Countrys competivieness is combination of level of input and output prices and productivity level Changes in competitiveness because of changes in these prices and in productivity relative to other countries II simple analytics of productivity and growth More refinements in the measurement of the quality of inputs will reduce residual Stock of knowledge continues to grow, not a costless process Residual measure of productivity is not a pure measure of technical change except in limited circumstances Factors like imperfect competition, increasing returns, regulation and other governmental and behavioural choices on productivity have consequences 6 facts about economic g rowth 1) Output per worker shows continuing growth with no tendency for falling rate of growth of productivity 2) Capital per worker shows continuing growth 3) Rate of return on capital is steady 4) Capital to output ratio is steady 5) Labour and capital receive constant shares of total income 6) Wide differences in rate of growth of productivity across countries www.notesolution.com
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