• khấu hao của tỷ giá hối đoái sẽ dẫn đến xuất khẩu tăng (tiêm) và nhập khẩu giảm (thu hồi). Điều này có thể khuyến khích đầu tư trong nền kinh tế trong nước. • tiết kiệm cao hơn sẽ có nghĩa là tiêu thụ ít hơn tổng số, bao gồm cả chi phí ít hơn vào nhập khẩu. | Introduction to Economics ECO401 VU Lesson 1 THE FOUR BIG MACROECONOMIC ISSUES AND THEIR INTER-RELATIONSHIPS CONTINUED. Link between growth and the various factors of production Before we move to neo-classical and endogenous growth theories let us gain a better understanding of the link between growth and the various factors of production. We begin by recalling the familiar Cobb-Douglas constant returns to scale production function Y KaL1-a for a hypothetical economy. Here Y denotes output K denotes capital machines buildings etc. L denotes labour and a is a parameter that lies between 0 and 1. Dividing both sides by L and substituting Y L y per capita output and K L k per capita capital we have the per capita production function y ka. Labor and Capital Now for a given L and no depreciation an increase in K should translate into an increase in k and through it an increase in y. This is an example of capital deepening induced growth. However when there is depreciation say at a rate d . of the capital stock and the labour supply is growing at n . capital must grow at least by d n . in order keep K L or k constant. This is called capital widening . more capital being created but spread over a larger population so as to deliver the same K L. The per capita output impact of capital widening is zero because k remains the same. Now taking capital as fixed let s analyze the ways in which labour can serve as the engine of growth. It is obvious that an increase in the no. of labour hours worked would expand output. However historically the working week has been shortened from 6 to 5 days so it would be incorrect to cite this as the major source of world economic growth over the last century. What else could therefore have driven the rapid expansion of production in the 20th century. It might be the case that there are now more people on the labour force due to perhaps a larger proportion of women doing marketable jobs which is historically accurate . Then it
