Determine the sources of divergence, Microeconomics

Assignment Help:

Sources of Divergence

The principal cause of extraordinary variation in output per worker between countries today are differences in their corresponding steady-state capital-output ratios. Two secondary causes are, first is openness to creating and adapting the technologies which improve the efficiency of labor as measured by levels of development two generations ago and second is the level of education today.

Productivity of two generations ago is a good indicator of the level of technological knowledge that had been attained as of half a century ago. The level of education today captures country's ability to invent and obtain further technological expertise today. Inventing new and adopting foreign-born technological knowledge is simply not possible without education,

Together these factors-- determinants of capital-output ratios and two determinants of access to technology--together account for the bulk of differences between nations in their relative productivity levels.

The determinants of steady-state balanced-growth capital-output ratio play a very dominant role. A higher share of investment in national product is strongly correlated with relative levels of output per worker. No nation with an investment rate of less than 10% has an output per worker level even 20% of the U.S. No country with an investment share of less than 20% has an output per worker level greater than 75% of the United States level

 


Related Discussions:- Determine the sources of divergence

Control of monopsony relating to market power, It is clear that monopsony i...

It is clear that monopsony in the labor market is not steady with allocative efficiency and has the effect of withholding significant amounts the employees' MRP from them, that bec

Why do demand curves generally slope downward, Why do demand curves general...

Why do demand curves generally slope downward?  The demand curve slopes downward because in general, the higher the price of the good, the fewer people will need to buy it.

Structural unemployment, Structural Unemployment: This is unemploymen...

Structural Unemployment: This is unemployment resulting from changes in the pattern of demand for goods and services or changes in technology.These changes may in turn alter

Labor-leisure analysis, Joe won $365,000 a year for life in the state lotte...

Joe won $365,000 a year for life in the state lottery. Use a labor-leisure choice analysis to answer the following: a. Show how Joe’s lottery winnings affect the position of his b

Canalisation, State trading is often associated with canalisation. Canalisa...

State trading is often associated with canalisation. Canalisation means estaolishment of state monomply in foreign trade. In other words, an item that is canalised can be imported

What is working of world bank, Q. What is working of world Bank? An int...

Q. What is working of world Bank? An international financial organization formed after World War II and based in Washington D.C. Its supposed purpose is to promote economic dev

Inverse market demand curve, Problem: i) The  inverse market demand cur...

Problem: i) The  inverse market demand curve for a Stackelberg leader and follower is given by  P = 10  - Q. If each has  a marginal cost of $4, what will be the equilibrium qu

Assigment, What is the theory of second best? Prove the theorem with the he...

What is the theory of second best? Prove the theorem with the help of diagram.

Explain tragedy of commons-tax incidence-elasticity, 1. Explain- a. Trag...

1. Explain- a. Tragedy of commons b. Free rider problem c. Diminishing marginal utility d. Diseconomies of scale e. Tax incidence f.  Elasticity g. Gains from

Population information, What population information is needed by local auth...

What population information is needed by local authorities to provide the right number of primary and secondary school places? How would such information affect the plans of the lo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd