Productivity

What is it? How do we measure it? What does it mean for our future?

Prof. Jeff Takle(857) 277-9050 | jeff.takle@gmail.com

What is Productivity?

Productivity =

FRY COOK?

SEWING MACHINE?AUTO INDUSTRY?U.S.A.?

A MANAGER OF FRY COOKS?

OutputInput

What Improves Productivity?• Investing in Capital!

▫ Human capital▫ Physical capital

• What is the opportunity cost of investing in capital?▫ Consumer goods▫ Aka “spending” (ergo “savings

rate”)

• Per-Worker Production Function

Optimal Savings Rate0

Does Technological Change Lead to Unemployment?The sad tale of Computers, Robots, and Paul Bunyon

Why invest in Research & Development?Your college educationStem cell therapyElectric cars

Cancer scientists make stem cell breakthrough

Researchers at University of Dundee find form of stem cell activity that could help early diagnosis and treatment of killer disease.12 February 2010 05:55 AM Where did this happen?

How?What is the benefit?

What is the impact for governments?

Why Did U.S. Gov’t Oppose Stem Cell Research in 2004?

“…An embryo, argues the president, is a nascent human being. Extracting embryonic stem cells requires growing an embryo for five days until it is a tiny colony of about 300 cells. The extraction kills the embryo. [George Bush] believes that is immoral and federal funds should not be used in this kind of research. It is, in essence, the abortion argument.”

Chicago Tribune – June 9, 2004, p31

GM making $246 million push into electric motor technology

(Investment supported by $105 million U.S. gov't grant)

DETROIT, Jan 26 (Reuters) - General Motors Co said on Tuesday it will set up a $246 million facility backed by funding from the U.S. government to build electric motors to power hybrids and possibly pure electric vehicles.

About 200 jobs will be created to double the workforce at an expanded GM plant in Baltimore that currently makes transmissions…

Capital Goods

Con

sum

er

Good

s

PPFAggregate Supply & Demand

Per-Worker Production Function

How Can the U.S. Get More Productive?

See graphs on p. 92-93