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Lecture 8
Lecture 8
October, 2008
MACRO-ECONOMIC MODELS OF
TRANSPORT PRODUCTIVITY
Historically, the focus of most productivity
studies has been the private sector --- how private
sector decisions with respect to output,
employment, and capital accumulation have
contributed to productivity growth.
continued….
Y = Y(X,PK) (1)
PK ∂Y
e PK = · (2)
Y ∂PK
C =C(Y,Px,PK) (3)
∂C
Xi(Y,Px,PK)= i
∂Pi
The relevant cost elasticity computed from (3) for
our purposes is the percent reduction in output costs
for a percent increase in infrastructure stocks.