L5

• What is technical progress?

  Improvements in technology that enhance productivity
• What is public policy?

  Government actions that influence growth
• How does exogenous technical progress differ from endogenous technical progress?

  Exogenous occurs randomly; endogenous arises internally
• What does exogenous technical progress do to the production function?

  Shifts the production function upward
• What is a limitation of exogenous technical progress?

  It does not explain the sources of progress
• What drives endogenous technical progress?

  Factors like innovation, investment, and human capital
• How can economies sustain growth according to endogenous growth models?

  By fostering conditions that encourage innovation
• What is the difference in returns to capital between neo-classical and endogenous growth models?

  Endogenous models hypothesize constant or increasing returns
• What is the linear production function in endogenous growth models?

  $y=$$ak$, where output grows with capital
• What role does human capital play in endogenous growth?

  It enhances productivity through knowledge and skills
• What is the non-rivalrous nature of human capital?

  Ideas and knowledge can be shared without diminishing value
• How do governments influence economic growth?

  Through infrastructure, education, and technology support
• What types of infrastructure support economic activities?

  Roads, bridges, and utilities
• How does investment in education and health affect growth?

  It improves workforce productivity
• What is the purpose of technology support from governments?

  To encourage research and innovation
• What is social infrastructure's role in economic growth?

  A stable legal system attracts investments
• How do savings and investment influence growth?

  High savings rates support sustained growth
• How does population growth affect economic growth?

  It can dilute income per capita but increase total output
• What is learning-by-doing?

  Continuous improvements through practice boost productivity
• Why must growth be sustainable?

  To avoid depleting resources and harming the environment
• What should policy incentives focus on for sustainable growth?

  Environmentally friendly innovations
• What challenges hinder equitable growth globally?

  Political instability and poor governance
• What are the key takeaways regarding technical progress and growth?

  • Technical progress is vital for long-term growth
  • Human capital and innovation drive sustainable growth
  • Governments create conditions for growth
  • Sustainable growth mitigates environmental pressures