Investment, Growth and the Productivity of Labour (i)
As suggested in the foregoing chapter, we have reason to believe that the most important single factor responsible for the sluggishness of British exports has been the slow growth of the productivity of labour in British industry. Or, to put it the other way round: the most likely reason for the rapid expansion of E.E.C. exports has been the fast increase in the productivity of labour in Continental industries. The main advantage of this conclusion is that it leads to a neat argument; for instead of having to explain three independent barriers to growth — supply, external balance and exports — we end up in this way with only one major barrier, since we assume that the rate of growth of productivity has exerted a determining influence on supply and demand as well as on the balance of payments.
KeywordsCapital Stock Capital Accumulation Technical Progress Capital Good Small Country
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