Macroeconomics CTW

 Macroeconomics CTW Essay

1a. Technology and advancement are a pair of the most important parts of economic development in a country. For a country's economy to grow you must either increase the number of inputs in production, or you need to find a way to boost your output with the same number of inputs. This is essentially what technology has done for many economies. In the Solow version they take the standard Cobb Douglas function Sumado a = F(K, L) to show how expansion in capital stock and labor force impact the economy and exactly how they influence a nation's total result. This function assumes the number of staff (L) will certainly grow for a constant charge, n. Therefore the economy can grow in end result per employee until it strikes the stable state. At the steady state level our economy can still grow but only at the rate of labor force growth. This says that at some point most economies is going to reach a point when their standard of living is unable to be improved, and we realize that this is not authentic. For Solow's model to show how a countries production and economy can easily grow over time they have to add Technological Improvement to the function. To show the result that technology has on the growth of an economic climate they include the efficiency of labor towards the original function so , Y = F(K, L 5. E). The variable " E” means society's expertise on creation which we think of technology. So L * Electronic measures both, the workers inside the labor force plus the technology that each worker offers at his disposal. And so if the technology were to improve then this will cause " E” to enhance. When " E” really does increase it can be saying that every worker has become more efficient and may produce even more output than they can before. With a few technology in to the equation they are showing the technological progress is labor-augmenting. This means that while the technology improves it makes each worker even more productive simply by changing the way in which that they function. The rate of labor-augmenting technical progress is usually written while g. We can say that the labor force grows at the...

Cited: Mankiw, N. Gregory., and Laurence M. Ball.  Macroeconomics as well as the Financial System. Nyc: Worth, 2011. Print.

A queen University. " Technological Progress in Solow Model. "  Http: //qed. econ. queensu. ca/. Net. 15 Sept. 2014.


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