Increased demand allows economies of scale and scope and thus a fall in costs,
thus increasing productivity.
Anthony
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Anthony P. D'Costa, Professor Currently
Comparative International Development Senior Visiting Research Fellow
University of Washington Asia Research Institute
1900 Commerce Street National University of Singapore
Tacoma, WA 98402, USA 469 A Tower Block
Phone: (253) 692-4462 Bukit Timah Road #10-01
Fax : (253) 692-5718 Singapore 259770
http://tinyurl.com/yhjzrm Ph: (65) 6516 8785
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On Sun, 23 Sep 2007, raghu wrote:
Date: Sun, 23 Sep 2007 12:29:47 -0700
From: raghu <[EMAIL PROTECTED]>
Reply-To: PEN-L list <[email protected]>
To: [email protected]
Subject: Re: [PEN-L] Queery about Greenspan and productivity
On 9/23/07, Eugene Coyle <[EMAIL PROTECTED]> wrote:
contributes to productivity gains.) What I mean is that consumer
demand is a factor in productivity gains. If people aren't buying
stuff, i.e. increasing their buying, productivity gains won't come,
will they? I mean, why bother improving if you (the producers,
collectively) can't sell more.
I don't see why this necessarily follows. Producers can make
improvements either (1) to produce more with the same amount of labor,
or (2) produce the same amount with less amount of labor. You'll have
productivity gains in both cases.
Increased buying is only relevant for unemployment not productivity.
Producers may be forced to adopt productivity-increasing changes even
in a stagnant market because of competition.
-raghu.
