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The technical progress function is a concept developed by
Nicholas Kaldor Nicholas Kaldor, Baron Kaldor (12 May 1908 – 30 September 1986), born Káldor Miklós, was a Cambridge economist in the post-war period. He developed the "compensation" criteria called Kaldor–Hicks efficiency for welfare comparisons (1939), d ...
to explain the rate of growth of
labour productivity Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor producti ...
, as a measure of technical progress. The function is described by the following statements: #The larger the rate of growth of
capital Capital may refer to: Common uses * Capital city, a municipality of primary status ** List of national capital cities * Capital letter, an upper-case letter Economics and social sciences * Capital (economics), the durable produced goods used fo ...
/input per
worker The working class (or labouring class) comprises those engaged in manual-labour occupations or industrial work, who are remunerated via waged or salaried contracts. Working-class occupations (see also " Designation of workers by collar colo ...
, the larger the rate of
growth Growth may refer to: Biology * Auxology, the study of all aspects of human physical growth * Bacterial growth * Cell growth * Growth hormone, a peptide hormone that stimulates growth * Human development (biology) * Plant growth * Secondary growth ...
of
output Output may refer to: * The information produced by a computer, see Input/output * An output state of a system, see state (computer science) * Output (economics), the amount of goods and services produced ** Gross output in economics, the value of ...
per worker, of labour productivity. The rate of growth of
labour productivity Workforce productivity is the amount of goods and services that a group of workers produce in a given amount of time. It is one of several types of productivity that economists measure. Workforce productivity, often referred to as labor producti ...
is thus explained by the rate of growth of
capital intensity Capital intensity is the amount of fixed or real capital present in relation to other factors of production, especially labor. At the level of either a production process or the aggregate economy, it may be estimated by the capital to labor ratio, ...
. #In equilibrium capital/input per worker and output per worker grow at the same rate, the equilibrium rate of growth. #At growth rates below the equilibrium rate of growth, the growth rate of output per worker is larger than the growth rate of capital/input per worker. #At growth rates above the equilibrium rate of growth it is the other way round, the rate of growth of output per worker is less than the rate of growth of capital/input per worker.


References

* * {{cite journal , last=Besomi , first=Daniele , title=Harrod on the classification of technological progress. The origin of a wild-goose chase , journal=BNL Quarterly Review , volume=208 , pages=95–118 , year=1999 , url=http://economia.unipv.it/harrod/sec-lit/besomi/bnlqr99.pdf Economic growth Innovation Progress