What's it: Total factor productivity quantifies the share of economic growth not explained by increases in labor and capital when both are used together in the production process. We also often refer to it as the residual Solow model
Long Run Economic Growth
Capital Deepening: Meaning, Determinants, and Impacts
What's it: Capital deepening is an investment to increase the capital-to-labor ratio. It is one of our ways to encourage economic growth and increase potential output in the long run. Assuming the supply of labor (as measured by the
Aggregate Hours Worked: How to Calculate and Impact on the Economy
What's it: Aggregate hours worked refers to the total number of hours worked by the labor force in an economy during a given period. It represents the total time it takes for laborers to produce the gross domestic product in one
Harrod-Domar Model: Formula, Assumptions, Importance, Limitations
What’s it: The Harrod-Domar model is an economic growth model that uses saving and investment as growth sources. The model takes two economists, Sir Roy Harrod and Evsey Domar, who independently developed the model in 1939 and
Solow Growth Model: Concept and Formula
What's it: Solow growth model is a long-term model of economic growth by looking at three main factors, namely capital accumulation, labor growth, and multifactor productivity. For the latter, economists refer to technological progress,