determinants of economic growth sp15

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Determinants of Economic Growth

Like China, Dubai has experienced significant growth. In this presentation we will briefly examine the factors of economic growth.Increases in the quantity and quality of natural resourcesIncreases in the quantity and quality of human resourcesPer-Worker Production FunctionCapital GoodsTechnologyDemand Side of Economic GrowthEfficiencyWhat Determines Economic GrowthIncrease in Quantity of Natural Resources

Natural resources are used to produce goods and services. The more natural resources we have the more we are able to produce.Increase in Quantity of Natural ResourcesHow do we get more natural resources?We can discover moreConservation

Exploring for petroleumConserving ResourcesFracking is a new drilling technique that allows us to get more oil from wells that were not productive using older techniques.Increase in Quality of Human ResourcesHuman resources, or human capital, are the knowledge and skills that make a person productive.

Increase in Quality of Human ResourcesHuman capital involves improvements in workers (learning new skills) that will increase output. The more productive a worker is the more they will add to output.

Human capital is improved by: On the Job Training Education

On the Job TrainingFormal education or other types of training will increase the productivity of the workforce.Increase in Quantity and Quality of CapitalThe more capital that workers have access to, the more goods and services that can be produced.Scythe allowed 3 acres a dayReaper allowed 15 acres a dayCombine allows 100 acres a dayPer-Worker Production Function impact of capitalThe per-worker production function shows the relationship between the amount of capital per worker and the output per worker.

Any point on the production function shows how much output per worker can be produced for a given amount of capital per worker

When there are k units of capital per worker, average output per worker in the economy is y.

The per-worker production function basically shows that as workers are given capital, they are able to produce more too a pointkyCapital per workery shows output per workerProduction FunctionTechnologyTechnology is a huge drive in productivity and thus economic growth. Technology allows workers to produce more, even with the same amount of physical and human capital.The use of google glass can allow workers to be more productive.Demand Side of Economic GrowthIn order for economic growth to occur, there must be a demand for the goods and services produced.DemandProductive Efficiency

The last ingredient necessary for economic growth is productive efficiency. That is we dont waste the resources we have.

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