The Aggregate Production Function

Interactive Growth Model

Y = A · f ( K, HK, L, Institutions )

Physical Capital (K)

Moves along the curve

Capital stock

Technology (A)

Shifts the entire curve

TFP level

Human Capital (HK)

Shifts the entire curve

Education & skills

Labor (L)

Shifts the entire curve

Workforce size

Institutions

Shifts the entire curve

Rule of law & markets
K
50
Y (GDP)
—
MPK
—