the Effects of factor Growth (1)

The second source of economic growth is increased availability of the factor of production .we consider the impact of factor growth in terms of two homogeneous inputs ,capital and labor.in the real world ,there are other primary inputs such as natural resources ,land and human capital ,and factor do not tend to be homogeneous .Labor and capital remain ,however ,two of the imports inputs ,and the insights gained from examining K and L can be extended to the more general case .Estimates for the growth in capital and labor for selected countries for 1966-2001 are presented .
An increase in factor abundance can take place trough increases in capital stock of country ,increase in the labor force ,or both .the capital stock of a country grows as domestic and foreign investment occurs in the country .the labor force expands through increase in population (including immigration) ,increase in the labor force participation rate ,or both .if both labor and capital grow at the same rate,the PPF will sift out proportionally ,as in the case of commodity-neutral technological change . this factor-neutral growth effect in demonstrated in panel in figure 6 with the new PPf that is farther out than the old.