Macroeconomics Essay Example | Topics and Well Written Essays - 250 words - 4

Macroeconomics - Essay Example ference to the studies conducted by (Krugman and Wells 254) the differences noted above in terms of growth of the livings standards can be attributed to differences in the level of each country’s physical capital which is mainly determined by a country’s level of savings and investment. Secondly, the differences can be attributed to differences in education levels of each country, the technological progress, government policies and the level of political stability that is experienced in each country. Physical capital such as office space and machineries influence long-run economic growth of aggregate output per capita by increasing the productivity of a worker. Human capital also influence long-run economic growth of aggregate output per capita since a well educated and highly trained employee will offer more competitive advantage and increase the value of labor. Thirdly technology influence long-run economic growth of aggregate output per capita by increasing efficiency and effectiveness of production whilst reducing the operating cost. Lastly, according to (Krugman and Wells 251) natural resources do not necessarily influence the long-run economic growth of aggregate output per capita in today’s World as it did in the past centuries. However, it is of essence to note that natural resources have the potential of increasing a country’s foreign exchange income thus influence the long run economic growth of a country that is endowed with natural resources such as min eral deposit and abundant