The government can achieve permanent higher growth rates by having two determinants of growth. The two primary determinants of growth are capital accumulation and technological progress. Capital changes when there are changes in investment and therefore, the saving rate. Because the saving rate cannot increase forever, capital accumulation cannot cause permanent changes in economic growth. Technological progress on the other hand, can result in permanent changes in economic growth.
The government can achieve permanent higher growth rates by having two determinants of growth. The two primary determinants of growth are capital accumulation and technological progress. Capital changes when there are changes in investment and therefore, the saving rate. Because the saving rate cannot increase forever, capital accumulation cannot cause permanent changes in economic growth. Technological progress on the other hand, can result in permanent changes in economic growth.
Chapter16: Economic Growth
Section: Chapter Questions
Problem 3E
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The government can achieve permanent higher growth rates by having two determinants of growth. The two primary determinants of growth are capital accumulation and technological progress. Capital changes when there are changes in investment and therefore, the saving rate. Because the saving rate cannot increase forever, capital accumulation cannot cause permanent changes in
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