Long-Term Economic Growth, Essay Example

The role of long-term economic growth is one of the main indicators racy material living standards of US citizens.  Over the last 25 years of his USA this has remained relatively stable.  In order to stimulate economic growth and increase the aggregate supply.  US-based investor in the following areas:

1. Physical capital: This means equipping the workforce with better tools and machinery in order to make them more productive.  This is often referred to as capital deepening, the concept of diverting resources and producing goods for current source to the production of capital goods i.e. factories, machine tools etc. It does provide the capacity to develop a revitalized economy and future growth.
2. Human capital: the ability to improve a worker’s productivity.  By the enhancement of the skills that he brings to the labour market.  Also referred to as increasing the stock of human capital.  It means that workers output cannot be boosted until he or she has sufficient skills to enable same.  There is therefore a need to invest in training and development of individuals. ” The government has long played a large and active role in support of education. It is the dominant supplier of elementary and secondary education and also provides sizable support for higher education.” (Elwell)
3. Technical knowledge:  In economics, this refers to how scarce resources are brought together to enable the production of goods and services.  Advances in technology stimulate economic growth. ” Steadily advancing the economy’s stock of technical knowledge is acknowledged by economists to be the element of central importance for achieving long-term economic growth.”  (Elwell)