An example will help to illustrate the basic way that labor productivity growth works through increases in the capital stock. Say there is a riveter named Joe. Joe works in a factory that makes metal boxes that are riveted together. He has a riveting tool that can rivet at a rate that allows Joe to finish 4 metal boxes every hour. Joe's labor productivity is thus 4 boxes per hour. One day, Joe gets a second riveting tool. With two tools, Joe can produce 8 metal boxes every hour. Now Joe's labor productivity has increased from 4 boxes per hour to 8 boxes per hour. The increase in the physical capital available to Joe, that is, a second tool, allowed this increase in Joe's labor productivity. For every hour of work Joe puts in, he can produce 100% more output due to an increase in the physical capital available to him. Another example may also be of use. Say there is a chef named Susan. Susan can
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