Economic Growth - One Third Rule capital, technology, average, increase

LorrinCFA

Hi guys, a simple point below but the book seems to contradict itself (CFAI Book, Economics pg 482)

"One third rule, that on the average, with (!)no change in technology(!) a 1 percent increase in capital per hour of labor brings a 1/3 percent increase in labor productivity. The one third rule is used to calculate the contributions of an increase in capital per hour of labor and (!) technological change(!) to the growth of labor productivity.


The (!) I have added but how can we assume no tech change and then use the results to calculate a tech change?

Thanks for any help.

senlinlang

Econ is screwed man. You can convince anyone whatever you want.
Long term effect, short term effect. grr

firat

Thanks Revisor, thats what the book should have said. Much clearer!