analyze the impact of the tubrological progress upon the production function
Answers
Explanation:
The technical progress function (TPF) is an economic measure that seeks to identify the attributable influence of technological progress on total output through the use of a regression model. Technological progress can be an important factor in a country’s economic growth because it helps a country to produce more through the use of better technology on the input side of the production equation. Thus, rather than looking at economic production growth purely in terms of input allocation efficiency, the technical progress function provides a way for measuring technological progress as a contributor to final production overall.
When analyzed in more depth, economic statisticians may seek to break out technological progress into two elements. The two main elements of technological progress are usually:
Robert Solow received a Nobel Prize for his work on concepts of technical progress function also known as the Solow Residual and total factor productivity (TFP). Solow laid out the growth model used to understand productivity with his model detailing the different functions that influence productivity. Solow’s model includes the functions of capital, labor, and technological progress. It can also be modified for the inclusion of additional variables.
In Solow’s model, the technical progress function is referred to as total factor productivity. Total factor productivity is the reading on how much technological progress is influencing the total output.
When using the model for the years 1909-49 in the United States, Solow found that only one-eighth of the increase in labor productivity in the United States could be attributed to increased capital. America, in other words, became great because of American know-how and innovation.
Total factor productivity can be affected by a variety of influences. While all under the umbrella of technological progress, influences can include tech, cultural factors, and new economic efficiencies. As such, the technical progress function and TFP can also be used to analyze differences in countries’ technological influences and technological progress.
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