ECON 102 1st Edition Lecture 16 Outline of Last Lecture 1 Unemployment Rate Outline of Current Lecture I Long Run Growth a Productivity b Other Factors Current Lecture Long Run Growth o Long run economic growth depends almost entirely on one ingredient rising productivity Productivity Output per worker GDP Real of workers o What other factors are responsible for Long Run Growth 1 Physical Capital Manufactured resources such as machines buildings and equipment It s not enough for a worker to have good equipment they must also have the knowledge of how to use it o EX A worker operating a backhoe can dig a lot more feet of trench per day than one equipped only with a shovel 2 Human Capital The improvement in labor created by the education and knowledge embodied in the workforce o Some suggest that education and its effect on productivity is an even more important determinant of growth than increases in physical capital 3 Technological Progress An advance in the technical means of the production of goods and services o Workers today are able to produce more than those in the past even with the same amount of physical and human capital because technology has advanced over time These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Productivity is higher other things equal when workers are equipped with more physical capital more human capital better technology or any combination of the three
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