Technical Progress

  • Ramu Ramanathan
Chapter
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 205)

Abstract

So far we have considered only two factors which contribute to economic growth — capital accumulation and growth of the labor force. But growth is possible because of technical changes in the production processes. In fact several studies have found that the observed increases in per capita income cannot be accounted for by capital formation alone. Change in productivity is the major explanation1. Technical progress is said to occur if the production function shifts upwards over time; that is, more output can be obtained with the same amounts of labor and capital. Such a shift may be due to innovations, education of the labor force or other factors. In this chapter we study the effects of technical progress on the long run behavior of an economy.

Keywords

Total Factor Productivity Technical Change Real Wage Marginal Product Saving Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© Springer-Verlag Berlin Heidelberg 1982

Authors and Affiliations

  • Ramu Ramanathan
    • 1
  1. 1.Department of EconomicsUniversity of CaliforniaLa JollaUSA

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