4 ms·
It is more complicated - there is workforce and capital. In order to have higher labor productivity (or GDP per capita), you need higher rate of capital to labo
by zajio1am 7y ago
It is more complicated - there is workforce and capital. In order to have higher labor productivity (or GDP per capita), you need higher rate of capital to labor, so you need that capital growth be larger than workforce growth.
If you increase workforce but not increase capital (or increase workforce more than capital), then it is true that economy as a whole (GDP) will grow, but GDP per worker will go down, there would be downward pressure to wages and upward pressure for capital yield.