Productivity is a key driver of economic growth according to the theory of aggregate supply. GDP depends on output, which depends on productivity and labor inputs. Using a Cobb-Douglas production function, total factor productivity can be calculated as a weighted average of labor and capital productivity. While East Asian economies grew rapidly in the 1960s-2000s, growth accounting shows most of their growth was due to factor accumulation rather than productivity growth. In fact, capital productivity was declining over this period in these countries. So the East Asian growth experience may not have been a productivity "miracle" as previously thought.
Production Function is a statement of the relationship between a firm’s scarce resources (inputs) and the output that results from the use of these resources.
In mathematical terms, the PF can be expressed as:
Q= f (X1, X2…………Xk) where
Q=output, X1…………Xk=inputs used in the production process
Production Function is a statement of the relationship between a firm’s scarce resources (inputs) and the output that results from the use of these resources.
In mathematical terms, the PF can be expressed as:
Q= f (X1, X2…………Xk) where
Q=output, X1…………Xk=inputs used in the production process
cost of production / Chapter 6(pindyck)RAHUL SINHA
topics covered
•Production and firm
•The production function
•Short run versus Long run
•Production with one variable input(Labour)
•Average product
•Marginal product
•The slopes of the production curve
•Law of diminishing marginal returns
•Production with two variable inputs
•Isoquant
•Isoquant Maps
•Diminishing marginal returns
•Substitution among inputs
•Returns to scale
•Describing returns to scale
Paul H. Douglas, Professor at the University of Chicago introduced the production function in 1934. Another prominent economist Robert Solow has also conducted extensive research and found out how the technological progress has improved the productivity of inputs, viz., capital and labour in America.
In modern terminology, the various factors like land, labour, capital, organization skill, raw materials and other factors made use of in production are given a wider connotation called inputs. The product realized due to the inputs is called output. Inputs indicate the cost involved in procuring various factors, commodities as raw materials, power, etc., while output indicates the goods and services produced. Production is a process in which the physical inputs are transformed into physical output. The output is thus the function of inputs. The functional relationship between physical inputs and physical outputs of a firm is known as a production function. The production function is a catalogue of output possibilities.
Law of Variable Proportions and Law of Returns to ScaleAyush Parekh
This presentation puts emphasis on
Law of Variable proportion and Law of Returns to Scale
It also puts light on production function, cost function, etc.
cost of production / Chapter 6(pindyck)RAHUL SINHA
topics covered
•Production and firm
•The production function
•Short run versus Long run
•Production with one variable input(Labour)
•Average product
•Marginal product
•The slopes of the production curve
•Law of diminishing marginal returns
•Production with two variable inputs
•Isoquant
•Isoquant Maps
•Diminishing marginal returns
•Substitution among inputs
•Returns to scale
•Describing returns to scale
Paul H. Douglas, Professor at the University of Chicago introduced the production function in 1934. Another prominent economist Robert Solow has also conducted extensive research and found out how the technological progress has improved the productivity of inputs, viz., capital and labour in America.
In modern terminology, the various factors like land, labour, capital, organization skill, raw materials and other factors made use of in production are given a wider connotation called inputs. The product realized due to the inputs is called output. Inputs indicate the cost involved in procuring various factors, commodities as raw materials, power, etc., while output indicates the goods and services produced. Production is a process in which the physical inputs are transformed into physical output. The output is thus the function of inputs. The functional relationship between physical inputs and physical outputs of a firm is known as a production function. The production function is a catalogue of output possibilities.
Law of Variable Proportions and Law of Returns to ScaleAyush Parekh
This presentation puts emphasis on
Law of Variable proportion and Law of Returns to Scale
It also puts light on production function, cost function, etc.
This is a ppt which will help you all to understand the multiplier concept in depth. It have plenty of step by step economic conversion, plenty of example.
Memorandum Of Association Constitution of Company.pptseri bangash
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
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Discover the innovative and creative projects that highlight my journey throu...dylandmeas
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"𝑩𝑬𝑮𝑼𝑵 𝑾𝑰𝑻𝑯 𝑻𝑱 𝑰𝑺 𝑯𝑨𝑳𝑭 𝑫𝑶𝑵𝑬"
𝐓𝐉 𝐂𝐨𝐦𝐬 (𝐓𝐉 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬) is a professional event agency that includes experts in the event-organizing market in Vietnam, Korea, and ASEAN countries. We provide unlimited types of events from Music concerts, Fan meetings, and Culture festivals to Corporate events, Internal company events, Golf tournaments, MICE events, and Exhibitions.
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⭐ 𝐅𝐞𝐚𝐭𝐮𝐫𝐞𝐝 𝐩𝐫𝐨𝐣𝐞𝐜𝐭𝐬:
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"𝐄𝐯𝐞𝐫𝐲 𝐞𝐯𝐞𝐧𝐭 𝐢𝐬 𝐚 𝐬𝐭𝐨𝐫𝐲, 𝐚 𝐬𝐩𝐞𝐜𝐢𝐚𝐥 𝐣𝐨𝐮𝐫𝐧𝐞𝐲. 𝐖𝐞 𝐚𝐥𝐰𝐚𝐲𝐬 𝐛𝐞𝐥𝐢𝐞𝐯𝐞 𝐭𝐡𝐚𝐭 𝐬𝐡𝐨𝐫𝐭𝐥𝐲 𝐲𝐨𝐮 𝐰𝐢𝐥𝐥 𝐛𝐞 𝐚 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐨𝐮𝐫 𝐬𝐭𝐨𝐫𝐢𝐞𝐬."
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
involves recognizing relationships between elements of the marketing mix (e.g.,
price and product quality), as well as assessing competitive and market conditions
(i.e., industry structure in the language of economics).
2. Income depends on Output,
Output depends on productivity and
labor
GDP, Y, is value produced.
GDP can be decomposed:
Yt
Yt
Lt
= ×
POPt Lt POPt
L = Labor is defined as hours worked.
Main concern in this chapter is productivity
3. Income per person, 2003
Groningen Growth & Development Center http://www.ggdc.net
GDP per Person
160.00
140.00
HK = 100
120.00
100.00
80.00
60.00
40.00
20.00
0.00
Hong Kong Singapore
South
Korea
Taiwan
Japan
USA
France
4. Productivity
GDP per Hour Worked
200.00
180.00
160.00
HK = 100
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0.00
Hong Kong Singapore
South
Korea
Taiwan
Japan
USA
France
5. Employment
Hours Worked per Capita
120.00
100.00
HK = 100
80.00
60.00
40.00
20.00
0.00
Hong Kong Singapore
South
Korea
Taiwan
Japan
USA
France
7. Factors of Production: Capital
Capital (Kt) is the stock of durable goods
(machines, equipment, buildings, etc.)
used to produce other goods.
Unit of measure is dollar-value.
Difficult to measure directly, so it is
defined indirectly.
8. Stock vs. Flow
Stock: Some variable that accumulates. Flow:
Channel of increase or decrease of a stock.
Example
Stock:
Government Debt
Flow: Government Revenue, Government
Expenditure
Example
Capital
Flow:
Investment (It), Depreciation (Dpnt)
10. Capital is Defined Recursivel
Perpetual Inventory Method
K t +1 = K t + I t − Dpnt
Method requires some initial guess at
capital stock. As original guess capital
depreciates, measure becomes more
accurate.
Constant Depreciation Rate
K t +1 = K t + I t − dK t = (1 − d ) K t + I t
11. Hong Kong Investment to Capital
Ratio
Investment to Capital Ratio (d = .09)
0.25
0.2
0.15
0.1
0.05
20
02
#
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
0
12. Hong Kong capital stock
Capital
3500000
3000000
2500000
2000000
1500000
1000000
500000
20
02
#
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
0
13. Productivity: Two Concepts
There are two basic measures of productivity.
1.
2.
Average Productivity: The average productivity of a
factor is output divided by amount of factor used.
Y Y
,
L K
Marginal Productivity: The extra output that would
be produced if an extra unit of a factor were used.
∆Y ∆Y
,
∆L ∆K
15. Aggregate Production Function
Assume aggregate output can be written
as an algebraic function of the aggregate
factors. Yt = Ft ( K t , Lt )
Technological change over time is
represented as a scaling factor, Q t.
Yt = F (Qt , K t , Lt )
Example: Cobb-Douglas
Yt = ( K t ) (Qt Lt )1− a
a
16. Marginal Productivity of Labor
Holding capital constant, the effect on GDP of
increasing labor by a small amount. Y = F(L)
MPL = ΔY/ΔL
The
slope of the production function
For very small increases in labor, can be calculated
with first derivative of output with respect to labor.
MPL = F’(L)
Diminishing returns suggests that if you hold one
factor constant, marginal returns are a
diminishing function.
20. Advantages of Cobb-Douglas Production Function
Constant Returns to Scale
If you increase both capital and labor by a
factor of N, then you will also increase
output by a factor of N
Yt = ( K t ) (Qt Lt )1− a → N × t = ( N ×K t ) (Qt N ×Lt )1− a
Y
a
a
Implications for Country Size: Output per
capita depends only on capital per capita
and labor per capita, not on population
a
Kt
Yt
Lt 1− a
size itself.
=
(Q
)
POPt
÷
POPt
t
POPt
21. Productivity Function
Labor productivity is a function of
technology and the capital-labor ratio.
Yt ( K t ) (Qt Lt )
yt ≡ =
Lt
Lt
a
( Kt )
=
La
t
a
1− a
1− a
(Qt Lt )
×
L1− a
t
( Kt )
=
a
a
1− a
(Qt Lt )
La L1− a
t t
K t 1− a
= ÷ Qt = kta Qt1− a
Lt
22. Advantages of Cobb-Douglas Production Function
Average Product & Marginal
Product
Under Cobb-Douglas, the marginal product is
proportional to average product.
Y
MPL = (1 − a ) ×K Q L = (1 − a )
L
Y
a −1
1− a
MPK = a ×K (QL) = a
K
a
1− a
−a
All intuition about things that change average
productivity carry-over 1-to-1 to marginal
productivity.
23. Advantages of Cobb-Douglas Production Function
Log-linear
Take natural log of output
(
)
(
)
(
)
Yt = ( K t ) (Qt Lt )1− a ⇔ ln Yt = ln K t a + ln Qt1− a + ln Lt1− a =
a
(
)
( )
ln Yt = a ln K t + (1 − a ) ln ( Qt ) + (1 − a ) ln Lt
Growth rate of output is a linear function of
the growth rate of capital, labor, and
technology.
(
)
ln Yt = a ln K t + (1 − a ) ln ( Qt ) + (1 − a) ln ( Lt )
ln Yt −1 = a ln ( K t −1 ) + (1 − a ) ln ( Qt −1 ) + (1 − a ) ln ( Lt −1 )
gtY = ag tK + (1 − a ) g tQ + (1 − a ) g tL
24. Marginal Product = A firm can raise its
profits by increasing
Marginal Cost
labor as long as the
Profit maximization
suggests that the
marginal product of a
factor should equal its
real cost.
The real cost of labor is
the real wage, the dollar
wage rate divided by the
price level.
Wt
MPL =
Pt
cost of the extra labor
is less than the extra
goods produced.
Since the extra goods
produced drops as
more labor is added,
firms will hire more
labor until the
marginal product falls
as low as the real
wage.
26. Advantages of Cobb-Douglas Production Function
Factor Shares
Labor compensation is the product of the
wage rate and the quantity of labor WtLt.
Wt
Yt
= (1 − a ) → Wt Lt = (1 − a ) PYt
t
Pt
Lt
Income left over to owners of capital is
also a constant share of output a∙Yt
27. Implications
Labor share of income (labor intensity) is
equal to the ratio of the marginal product
of labor to the average product.
Wt
∆Y
∆Y
Wt Lt
Pt MPLt
∆L =
Y = 1− a
=
=
=
Yt
Y
∆L
PYt
APLt
t
L
L
Lt
29. Total Factor Productivity
Total factor productivity measures the total
effectiveness of an economy in applying
all of its factors of production.
TFP is a geometrically weighted average
of capital and labor productivity with factor
WL
intensity, at and 1-at = PYused as weights.
[1− at ]
Yt
TFPt = ÷
Lt
at
Yt
÷
Kt
Wt Lt
[1 − at ] =
PYt
t
30. TFP Growth
at
TFP
linear
[1− at ]
Yt Yt
TFPt = ÷ ÷
is log Lt Kt
⇔ ln TFPt = at ln
Yt
Y
+ (1 − at ) ln t
Lt
Kt
ln TFPt = at ln Yt − ln Lt + (1 − at ) ln Yt − (1 − at ) ln K t
ln TFPt = ln Yt − ln Lt − (1 − at ) ln K t
TFP growth rate is the gap between GDP growth
rate and the weighted average of the growth
rate of the factors of production.
ln TFPt − ln TFPt −1 = ln Yt − ln Yt −1 − (1 − at )[ln Lt − ln Lt −1 ] − at [ln K t − ln K t −1 ]
µtTFP = µtY − at µtL − (1 − at ) µtK
31. TFP Growth Rates over time
1.4%
1.2%
1.0%
0.8%
1980-1995
0.6%
1995-2001
0.4%
0.2%
0.0%
USA
EU
32. Advantages of Cobb-Douglas Production Function
TFP equals technology
If production is according to CobbDouglas, then TFP directly measures
technology. at =a.
1− a
[a]
Yt Yt
Yt
TFPt = ÷ ÷ = 1− a a =
Lt K t
Lt K t
K t a ( Qt Lt )
Lt1− a K t a
1− a
= Qt1− a
33. Growth Accounting
When we measure growth, we might want
to determine if this is caused by capital
growth, labor growth or capital growth.
Growth caused by
gY
Capital
a×gK
Labor
(1-a)×gL
Technology
gTFP
34. The East Asian Miracle 1965-2001
Output Growth Rate
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Hong Kong
Singapore
South Korea
Taiwan
USA
35. Myth of the East Asian Miracle
Alwyn Young, QJE 2001
TFP Growth Rates
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
Hong Kong
Singapore
South Korea
Taiwan
USA
EU
36. Criticisms
Critics of Young’s work that because of data
mismeasurement, they assumed that East Asian
production functions were different (greater
capital intensity) than developed economies.
Even using same production functions, most
East Asian growth differentials are due to factor
accumulation not TFP growth.
One key point, capital productivity was declining
in East Asia over this time period.