Paper - 1

Key points from the Paper - 1

• Technology to harness the available resources in an economic unit plays a very important role. As Technology changes (Neolithic revolution, Industrial revolution, Internet Revolution and The so-called fourth revolution), the mode of production changes drastically. So, In the long run it is technology and its reach (supply side) that determines the economic growth of an economic unit. In the long run, the focus of the management of an economic unit must be on the innovation and adoption of efficient technologies so that productivity (output) can be increased.
• When the technology is static (static period) in an economic unit, it is the aggregate demand that determines the economic growth in an economic unit and the focus must be on increasing the aggregate demand to generate the economic growth. Suppose that an economic unit is going through a recession or a low growth period, It won’t be possible to innovate a new technology (for increasing the productivity of the economic unit) to come out of recession in a very short span. It is the aggregate demand that can help to come out of a recession or low growth period.
• So, In an economy: In the long run it is technology that determines the economic growth and in short run aggregate demand determines the economic growth.