Скачать или смотреть 20.3 Components of Economic Growth

Title: Components of Economic Growth. Over time, a few percentage point rises in the annual rate of economic growth make an enormous difference in GDP per capita. Capital deepening refers to an increase in the amount of capital per worker, either human capital per worker, or physical capital per worker. Technology, refers broadly to all new methods of production, which includes major scientific inventions but also small inventions and even better forms of management or other types of institutions. A healthy climate for growth in GDP per capita consists of improvements in human capital, physical capital, and technology, in a market-oriented environment with supportive public policies and institutions.

The category of physical capital includes the plant and equipment that firms use as well as things like roads (also called infrastructure). Greater physical capital implies more output. Physical capital can affect productivity in two ways. (1) an increase in the quantity of physical capital. For example, more computers of the same quality. (2) an increase in the quality of physical capital. Same number of computers but the computers are faster, and so on. Human capital refers to the skills and knowledge that make workers productive. Human capital and physical capital accumulation are similar: In both cases, investment now pays off in higher productivity in the future.
Not only does the current U.S. economy have better educated workers with more and improved physical capital than it did several decades ago, but these workers have access to more advanced technologies. Growth in technology is impossible to measure with a simple line on a graph, but evidence that we live in an age of technological marvels is all around us.
While physical and human capital deepening and better technology are important, equally important to a nation’s well-being is the climate or system within which these inputs are cultivated. Key elements of economic growth are Education, Savings and Investment, Infrastructure, Special Economic Zones, Scientific Research.

A healthy climate for growth in GDP per capita and labor productivity includes human capital deepening, physical capital deepening, and technological gains, operating in a market-oriented economy with supportive government policies.
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