8/31/2023 0 Comments Aggregate production functionBut while such institutional determinants shape the “rules of the game,” they are not captured by the traditional production function. Recent developments identify the important determinants of the productive process to include: management practices, geographical factors, protection of property rights, public policies toward market regulation and macroeconomic stabilization, social insurance, and conflict management. It relates a nation's output of goods and services to the input of capital and labor, identifying the accumulation of physical capital, investment in human capital, and technological progress as the driving forces behind aggregate production. The production function is an abstract mathematical relationship that describes the quantity of output as a function of the quantity of input, assuming technical efficiency-the maximum output possible for every feasible combination of inputs. The use of aggregate production functions has been the major “hardware” in the theory of economic growth. Sten Thore, Ruzanna Tarverdyan, in Measuring Sustainable Development Goals Performance, 2022 6.6 Empirical production/transformation functions
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