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Factor Productivity and Potential Output Growth in South Africa
... constrained by demographics and diminishing returns. Although a useful tool for growth analysis, a simple growth decomposition exercise has its own limitations. One is that the approach based on the Cobb-Douglas production function does not disaggregate the factor inputs by their intrinsic quality. ...
... constrained by demographics and diminishing returns. Although a useful tool for growth analysis, a simple growth decomposition exercise has its own limitations. One is that the approach based on the Cobb-Douglas production function does not disaggregate the factor inputs by their intrinsic quality. ...
Keynes`s relevance in the new millennium
... Price stickiness was no more relevant either, but to show this requires us to review the heart of Keynes’s argument. This was that modern economies were characterised by two obvious features. One was the use of money and the other was that (for the vast majority of workers) ‘employment’ meant being ...
... Price stickiness was no more relevant either, but to show this requires us to review the heart of Keynes’s argument. This was that modern economies were characterised by two obvious features. One was the use of money and the other was that (for the vast majority of workers) ‘employment’ meant being ...
Human Capital Accumulation and Endogenous Growth in a Dual
... Banerjee and Newman (1998) etc. deal with the problems of co-existence of the advanced sector and the backward sector in less developed countries. Eicher and Penalosa (2001) deal with the complex relationship between growth and inequality due to offsetting supply of and demand for skills in an econ ...
... Banerjee and Newman (1998) etc. deal with the problems of co-existence of the advanced sector and the backward sector in less developed countries. Eicher and Penalosa (2001) deal with the complex relationship between growth and inequality due to offsetting supply of and demand for skills in an econ ...
Income Distribution and Economic Growth: Empirical Evidence from
... returns to capital and labor. From these two premises, the neo-classical model makes three important predictions: first, increasing capital relative to labor creates economic growth, since people can be more productive given more capital. Second, poor countries with less capital per person grow fast ...
... returns to capital and labor. From these two premises, the neo-classical model makes three important predictions: first, increasing capital relative to labor creates economic growth, since people can be more productive given more capital. Second, poor countries with less capital per person grow fast ...
Course Outline Word Document | AS/A level
... Understand movements along and shifts in PPFs. Understand why the PPF is usually drawn concave to the origin because of imperfect factor substitution and why a straight line PPF is an indication of perfect factor substitutability of resources. Explain factors which may shift the PPF inwards or outwa ...
... Understand movements along and shifts in PPFs. Understand why the PPF is usually drawn concave to the origin because of imperfect factor substitution and why a straight line PPF is an indication of perfect factor substitutability of resources. Explain factors which may shift the PPF inwards or outwa ...
Chapter 1 – Introduction – Michael Howlett (SFU) and Keith Brownsey
... of the banking and financial system away from consumer and small business credit to a concentration on large industrial loans and profits. vi The fact that staples reliant countries have tended to focus on markets in foreign lands is significant, in itself. As most staples-based countries have a mon ...
... of the banking and financial system away from consumer and small business credit to a concentration on large industrial loans and profits. vi The fact that staples reliant countries have tended to focus on markets in foreign lands is significant, in itself. As most staples-based countries have a mon ...
Pre-Test Chap 15 Handout Page
... (d) offset by the Fed’s inclination towards procyclical monetary policy. (e) unanticipated by businesses and consumers. Answer: A ...
... (d) offset by the Fed’s inclination towards procyclical monetary policy. (e) unanticipated by businesses and consumers. Answer: A ...
- Kendriya Vidyalaya No.1, Satna
... problem arises primarily due to scarcity of resources. Scarcity - Scarcity refers to the limited resources in relation to demand. Production Possibility Curve - It is a ...
... problem arises primarily due to scarcity of resources. Scarcity - Scarcity refers to the limited resources in relation to demand. Production Possibility Curve - It is a ...
CHAPTER 1 TOWARD ENDOGENOUS ECONOMIC GROWTH
... progress and foreign trade9. His position on technical progress changed in the third edition of his book from that of the first. In the beginning he recognized that technical advancement would help push the agricultural marginal product upwards and thus allow for more growth. However, he later modif ...
... progress and foreign trade9. His position on technical progress changed in the third edition of his book from that of the first. In the beginning he recognized that technical advancement would help push the agricultural marginal product upwards and thus allow for more growth. However, he later modif ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: National Saving and Economic Performance
... = 01. (In the present setting, with no labor-leisure choice, a consumption tax is equivalent to a lump-sum tax.) However, if g/y # a,the decentralized results with lump-sum taxes differ from the command optimum (conditioned on the specified value of g/y). The last result reflects external effects th ...
... = 01. (In the present setting, with no labor-leisure choice, a consumption tax is equivalent to a lump-sum tax.) However, if g/y # a,the decentralized results with lump-sum taxes differ from the command optimum (conditioned on the specified value of g/y). The last result reflects external effects th ...
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... terms of its current FDI attractiveness: a shortage of skilled workers in some sectors, including the economic heavyweights – ITC, food processing, machinery, construction sector; tax avoidance and a high tax burden on low-wage earners; and insufficient cooperation between the scientific sphere, aca ...
... terms of its current FDI attractiveness: a shortage of skilled workers in some sectors, including the economic heavyweights – ITC, food processing, machinery, construction sector; tax avoidance and a high tax burden on low-wage earners; and insufficient cooperation between the scientific sphere, aca ...
Adam Smith`s Invisible Hand versus Government`s Iron Fist
... owned property, even-handed enforcement of contracts, and a stable monetary environment. It also must keep taxes low, refrain from creating barriers to both domestic and international trade, and rely more fully on markets rather than the political process to allocate goods and resources” (Gwartney a ...
... owned property, even-handed enforcement of contracts, and a stable monetary environment. It also must keep taxes low, refrain from creating barriers to both domestic and international trade, and rely more fully on markets rather than the political process to allocate goods and resources” (Gwartney a ...
problems and exercises
... profit-maximizing firms employ K and L so that W/P=MPL and R/P=MPK, which are equal to W = P*MPL and R = P*MPK, where P is the product price, and W is nominal cost per worker and R the rental cost per unit of capital. Assume that the capital is owned by firms that rent out the capital to firms that ...
... profit-maximizing firms employ K and L so that W/P=MPL and R/P=MPK, which are equal to W = P*MPL and R = P*MPK, where P is the product price, and W is nominal cost per worker and R the rental cost per unit of capital. Assume that the capital is owned by firms that rent out the capital to firms that ...
Demand-Led Growth Theory: An Historical Approach
... complex of factors that inform a historically-based explanation of growth and economic development consistent with demand-led theory. In section 2 of the paper we build a ‘super-multiplier’ growth model in which utilisation of an economy’s productive capacity is assumed to always correspond to a giv ...
... complex of factors that inform a historically-based explanation of growth and economic development consistent with demand-led theory. In section 2 of the paper we build a ‘super-multiplier’ growth model in which utilisation of an economy’s productive capacity is assumed to always correspond to a giv ...
Charting Ways out of Europe’s Impasse – A Policy Memorandum
... added to the cost of bank rescues, pushing up government debt suddenly and by large amounts. Subsequently, in 2010-2012, as a sovereign debt crisis emerged, economic growth faltered, and borrowing costs for several euro area governments increased dramatically. Some governments were plunged into fund ...
... added to the cost of bank rescues, pushing up government debt suddenly and by large amounts. Subsequently, in 2010-2012, as a sovereign debt crisis emerged, economic growth faltered, and borrowing costs for several euro area governments increased dramatically. Some governments were plunged into fund ...
Wage-led versus profit-led demand regimes:
... despite the fact that in almost all OECD countries real wage growth was significantly restrained after 1980, allowing profitability to recover to its golden-age level, post-1980 macroeconomic performance is in general characterized by lower output growth, lower rates of investment, and higher rates ...
... despite the fact that in almost all OECD countries real wage growth was significantly restrained after 1980, allowing profitability to recover to its golden-age level, post-1980 macroeconomic performance is in general characterized by lower output growth, lower rates of investment, and higher rates ...
Practice Set 1
... 2. The short-run aggregate supply curve is positively sloped because: A. business people suffer from money illusion. B. wages are sticky or don't readily adjust to changes in economic conditions in the short run. C. workers care about nominal wages, not real wages. D. of diminishing returns to labor ...
... 2. The short-run aggregate supply curve is positively sloped because: A. business people suffer from money illusion. B. wages are sticky or don't readily adjust to changes in economic conditions in the short run. C. workers care about nominal wages, not real wages. D. of diminishing returns to labor ...
Ch17.pps
... The marginal product of capital for the Cobb-Douglas production function is MPK = aA(L/K)1-a. Because the real rental price equals the marginal product of capital in equilibrium, we can write R/P = aA(L/K)1-a . This expression identifies the variables that determine the real rental price. It shows ...
... The marginal product of capital for the Cobb-Douglas production function is MPK = aA(L/K)1-a. Because the real rental price equals the marginal product of capital in equilibrium, we can write R/P = aA(L/K)1-a . This expression identifies the variables that determine the real rental price. It shows ...
Document
... standard of living can be easily understood by recalling our circular flow model. In the circular flow model aggregate values of all goods and services produced in the economy must equal the payments made to the factors of production. So the only way an economy can increase its rate of consumption i ...
... standard of living can be easily understood by recalling our circular flow model. In the circular flow model aggregate values of all goods and services produced in the economy must equal the payments made to the factors of production. So the only way an economy can increase its rate of consumption i ...
Faculty Research Working Papers Series
... consequence of re-allocation of resources from low-productivity (agriculture) to higher productivity (manufacturing and services) or was there a trend improvement in the performance of individual sectors? There has been a substantial structural change in the composition of the labor force employed i ...
... consequence of re-allocation of resources from low-productivity (agriculture) to higher productivity (manufacturing and services) or was there a trend improvement in the performance of individual sectors? There has been a substantial structural change in the composition of the labor force employed i ...
Ragnar Nurkse's balanced growth theory
The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously. This will enlarge the market size, increase productivity, and provide an incentive for the private sector to invest.Nurkse was in favour of attaining balanced growth in both the industrial and agricultural sectors of the economy. He recognised that the expansion and inter-sectoral balance between agriculture and manufacturing is necessary so that each of these sectors provides a market for the products of the other and in turn, supplies the necessary raw materials for the development and growth of the other.Nurkse and Paul Rosenstein-Rodan were the pioneers of balanced growth theory and much of how it is understood today dates back to their work.Nurkse's theory discusses how the poor size of the market in underdeveloped countries perpetuates its underdeveloped state. Nurkse has also clarified the various determinants of the market size and puts primary focus on productivity. According to him, if the productivity levels rise in a less developed country, its market size will expand and thus it can eventually become a developed economy. Apart from this, Nurkse has been nicknamed an export pessimist, as he feels that the finances to make investments in underdeveloped countries must arise from their own domestic territory. No importance should be given to promoting exports.