technological progress

Question 1

what does Technological progress lead to

Answer 1

leads to increases in output for given
amounts of capital and labor.

Question 2

The state of technology

Answer 2

A

Question 3

extended production function

Answer 3

Y= (K,N,A)
K=capital
N=labor
A=state of technology

Question 4

extended production function 2

Answer 4

Y=(K,AN)
AN = effective labour

Question 5

assumptions of extended production function

Answer 5

-constant returns to scale
-decreasing returns to capital and effective labour

Question 6

per effective worker

Answer 6

Y/AN = f(K/AN)

Question 7

fertility of research

Answer 7

rnd leads to many new products

Question 8

appropriability

Answer 8

If firms cannot benefit the profits from the development of new products, they will not engage in R&D and technological progress will be slow.

Question 9

patents

Answer 9

give a firm that has discovered a new product—usually a new technique or device—the right to exclude anyone else from the production or use of the new prod- uct for some time.

Question 10

technology frontier

Answer 10

advanced countries that should spend money on rnd to sustain growth. countries further away from the techfrontier grow by immitation rather than innovation

Question 11

property rights

Question 12

research and development (R&D)

Question 13

balanced growth

Question 14

labor in efficiency units

Question 15

What determines the rate of technological progress?

Answer 15

the outcome of a firms research and development activities

Question 16

why does a firm spend money on rnd

Answer 16

to turn a profit, by investing in rnd it increases the probability that it will develop a new product, if this product is successful than the firms profits will increase :D

Question 17

What does the level of r&d spending depend on?

Answer 17

fertility of research—how spending on R&D translates into new ideas and new products
appropriability of research results - which is the extent to which firms can benefit from the results of their own R&D.

Question 18

How should governments design patent laws?

Answer 18

So patent law must strike a difficult b Chapter 22.
balance. Too little protection will lead to little R&D. Too much protection will make it difficult for new R&D to build on the results of past R&D and may also lead to little R&D.

Question 19

growth by innovation

Answer 19

growth by importing, adapting and imitating the existing technologies of the tech frontier advanced countries that are innovating them rather than developing new technologies of their own CHINA

Question 20

Why does china have poor patent protection

Answer 20

because it is more of a user and imitator than an inventor such as the tech frontier, therefore it wouldn’t have many domestic inventions. also they allow domestic firms to use and adapt foreign technology without having to pay high royalties to the foreign firms that developed the technology.

Question 21

Writing the production function in terms of capital and effective labor implies that as the level of technology increases by 10%, the number of workers required to achieve the same level of output _

Answer 21

decreases by 10%

Question 22

If the rate of technological progress increases, the investment rate (the ratio of investment to output) must

Answer 22

increase to keep capital per effective worker constant

Question 23

In steady state, output per effective worker grows at the rate of population growth.

Answer 23

false, it stays constant

Question 24

In steady state, output per worker grows at the rate of technological progress.

Answer 24

true

Question 25

growth rate of capital per effective worker at balanced growth

Answer 25

0, stays constant

Question 26

growth rate of output per effective worker at balanced growth

Answer 26

0, stays constant

Question 27

growth rate of capital and output at balanced growth/steady state

Answer 27

ga+gn

Question 28

growth rate of labour at steady state/ balanced growth

Answer 28

gn

Question 29

A higher saving rate implies a higher level of capital per effective worker in the steady state and thus a higher rate of growth of output per effective worker.

Answer 29

false, the change in saving rate does not change the rate of growth of output per effective worker only the level of output per effective worker

Question 30

Even if the potential returns from research and develop- ment (R&D) spending are identical to the potential returns from investing in a new machine, R&D spending is much riskier for firms than investing in new machines.

Answer 30

true, as fundamentally r&d produces ideas which could be replicated by other firms also there's running the risk that it won't be fertile or appropriated

Question 31

The fact that one cannot patent a theorem implies that private firms will not engage in basic research.

Answer 31

false

Question 32

Technology has not played an important part in Chinese economic growth.

Answer 32

false, think growth by immitation and low patent protection so low costs not having high royalties paid to foreign producers.

Question 33

Why is the amount of R&D spending important for growth? How do the appropriability and fertility of research affect the amount of R&D spending?

Answer 33

because it creates ideas which translate into new innovations of products

Question 34

assess the likely impact on the growth rate and the level of output over the next five years and over the next five decades cause by a permanent reduction in the saving rate.

Answer 34

a permanent reduction in the saving rate will lead to a slower rate of output for some time but not forever eventually it will stop at a lower level of output per worker

Question 35

assess the likely impact on the growth rate and the level of output over the next five years and over the next five decades cause by a permanent reduction in the rate of technological progress

Answer 35

the growth rate of output per worker would be reduced

Question 36

7. Discuss the potential role of each of the factors listed in parts a through g on the steady-state level of output per worker. In each case, indicate whether the effect is through A, through K, through H, or through some combination of A, K, and H. A is the level of technology, K is the level of capital stock, and H is the level of the human capital stock. a. Geographic location b. Education c. Protection of property rights d. Openness to trade e. Low tax rates f. Good public infrastructure g. Low population growth