EC140 Chapter Notes -Human Capital, Physical Capital, Longrun
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EC140 Full Course Notes
Verified Note
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Document Summary
The growth rate of % per year ignores short-run fluctuations around the long-run trend. The world"s richest countries have no guarantee they will stay the richest and the world"s poorest countries are not doomed forever to remain in poverty. Why productivity is so important: ex. Factor of production the inputs used to produce goods and services(labour, capital ) Capital is an input into the production process that in the past was an output from the production process. Woodworkers use a lathe to make the leg of a table, earlier the lathe itself was the output of a firm that manufactures laths. The lathe manufacturer in turn used other equipment to make its product. Capital is a factor of production used to produce all kinds of goods and services, including more capital: human capital per worker the knowledge and skills that workers acquire through education, training, and experience.
