{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

26 February 2013 Econ 202

Technological advancement new techniques or methods

Info iconThis preview shows pages 3–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Technological advancement: new techniques or methods that enable  production of more valuable output per unit of input o Technology allows you to shift the production function graph upward to  produce more GDP o Y = A*F(capital, labor, land) A = technology (a constant) o Technology offers sustained growth o What is the source of technology?
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
o How do economies get new technology? According to Solow, it arrives randomly It’s “exogenous” – outside Exogenous: introduced from or produced outside the organism  or system; specifically, not synthesized within the organism or  system Nothing in the economy is producing new technology, it just  comes in The introduction of technology is not related to anything inside  the economy; it’s just random Think of exogenous technology shocks as random All policy prescriptions stem from this key assumption about the source of  technological innovation
Background image of page 4
03/06/2013 14:25:00
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
03/06/2013 14:25:00
Background image of page 6
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}