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Growth, Productivity & Aggregate Supply

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Abstractions about aggregate production, economic growth, productivity feedback, structural change, inequality, and apparent productivity paradoxes.

5 abstractions in this family — domain-specific abstractions that sit near one another in structural-signature space (k-means over structural-signature embeddings). Each is shown with its short description.

  • Aggregate Supply — The total real output producers will supply at a given general price level — sloping up in the short run because wages are sticky, but vertical at potential output in the long run once the binding constraint migrates from nominal rigidity to capacity.
  • Kuznets curve — Read income inequality's response to development as an inverted-U — rising early as a dispersion force (sectoral transition) dominates and falling late as a compression force (skills and redistributive institutions) overtakes it — while checking whether the falling limb is developmental or merely contingent institutions.
  • Productivity Paradox — The observation that economy-wide investment in a new general-purpose technology fails to show up in aggregate productivity statistics for years or decades, because measured gains lag the complementary intangible investment — process redesign, skills, restructuring — the technology's payoff actually depends on.
  • Solow–Swan Model — The neoclassical growth model whose diminishing-returns structure drives each economy to a parameter-pinned steady state, yielding conditional convergence — economies sharing fundamentals close their gaps at a rate set by the capital share, while saving raises the level of income but not the long-run growth rate.
  • Verdoorn's Law — The empirical regularity that labour-productivity growth rises with output growth — a sustained one-point rise in manufacturing output growth adding roughly 0.5 points of productivity growth — so that fast output expansion endogenously induces productivity gains through learning, specialization, and capital deepening.