Some Remarks on the Effects of Productivity on Growth

Some Remarks on the Effects of Productivity on Growth

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Standard economic models predict that a ceteris paribus increase in the overall productivity results in an increased production if the economy departs from an equilibrium state.We show that this result is valid under specific conditions blauer traffic vest In other cases, even if the initial conditions of an economic system are so that the economy converges into (or starts from) an equilibrium state, the increase of overall productivity generally results, in the long run, in the collapse of the economy due to the unbalanced change cushcraft ar-10 in the money holdings.Hence, in general, an appropriate expansive monetary policy should accompany the increase of productivity.