Factor world
Encyclopedia
Factor World is a term used by William Easterly
to describe the traditional model of aggregate
production function
which is: Y = K^α . (AL)^(1-α)
It is a model of Factors of production
movement based on free movement of those factors which in theory would reduce inequality between nations.
It is used as the opposite of Productivity world
which claims relative productivity
amongst factors is the same in the sectors across countries, but rich countries have absolute productivity advantage.
William Easterly
William Russell Easterly is an American economist, specializing in economic growth and foreign aid. He is a Professor of Economics at New York University, joint with Africa House, and Co-Director of NYU’s Development Research Institute. He is also a nonresident senior fellow at the Brookings...
to describe the traditional model of aggregate
Aggregate data
In statistics, aggregate data describes data combined from several measurements.In economics, aggregate data or data aggregates describes high-level data that is composed of a multitude or combination of other more individual data....
production function
Production function
In microeconomics and macroeconomics, a production function is a function that specifies the output of a firm, an industry, or an entire economy for all combinations of inputs...
which is: Y = K^α . (AL)^(1-α)
It is a model of Factors of production
Factors of production
In economics, factors of production means inputs and finished goods means output. Input determines the quantity of output i.e. output depends upon input. Input is the starting point and output is the end point of production process and such input-output relationship is called a production function...
movement based on free movement of those factors which in theory would reduce inequality between nations.
It is used as the opposite of Productivity world
Productivity world
Productivity World is a term used by William Easterly to describe that relative productivity among Factors of production is the same in the sectors across countries, but rich countries have absolute productivity advantage....
which claims relative productivity
Productivity
Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average, expressing the total output divided by the total input...
amongst factors is the same in the sectors across countries, but rich countries have absolute productivity advantage.