Some Remarks on the Effects of Productivity on Growth

Zsolt Gilányi ()

Interdisciplinary Description of Complex Systems - scientific journal, 2007, vol. 5, issue 1, 14-20

Abstract: Standard economic models predict that a ceteris paribus increase in the overall productivity results in an increased production if the economy departs from an equilibrium state. We show that this result is valid under specific conditions In other cases, even if the initial conditions of an economic system are so that the economy converges into (or starts from) an equilibrium state, the increase of overall productivity generally results, in the long run, in the collapse of the economy due to the unbalanced change in the money holdings. Hence, in general, an appropriate expansive monetary policy should accompany the increase of productivity.

Keywords: economic growth and aggregate productivity; multisector growth; monetary growth (search for similar items in EconPapers)
JEL-codes: O41 O42 (search for similar items in EconPapers)
Date: 2007
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