26 February 2013 Econ 202

Technological advancement new techniques or methods

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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?
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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
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03/06/2013 14:25:00
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03/06/2013 14:25:00
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