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Technology shocks are sudden changes in technology that significantly affect economic, social, political or other outcomes. [1] In economics, the term technology shock usually refers to events in a macroeconomic model, that change the production function. Usually this is modeled with an aggregate production function that has a scaling factor.
Even the shaman's potions and sacred objects can be said to have involved some technology. So, from the very beginnings, technology can be said to have spurred the development of more elaborate economies. Technology is seen as primary source in economic development. [8] Technology advancement and economic growth are related to each other.
The difference is that GDP defines its scope according to location, while GNI defines its scope according to ownership. In a global context, world GDP and world GNI are, therefore, equivalent terms. GDP is a product produced within a country's borders; GNI is product produced by enterprises owned by a country's citizens.
Economic globalization refers to the widespread international movement of goods, capital, services, technology and information. It is the increasing economic integration and interdependence of national, regional, and local economies across the world through an intensification of cross-border movement of goods, services, technologies and capital ...
The digital economy is a portmanteau of digital computing and economy, and is an umbrella term that describes how traditional brick-and-mortar economic activities (production, distribution, trade) are being transformed by the Internet and World Wide Web technologies.
According to Abramovitz, these prerequisites must be in place in an economy before catch-up growth can occur, and explain why there is still divergence in the world today. The theory also assumes that technology is freely traded and available to developing countries that are attempting to catch-up.
Productivity-improving technologies date back to antiquity, with rather slow progress until the late Middle Ages. Important examples of early to medieval European technology include the water wheel, the horse collar, the spinning wheel, the three-field system (after 1500 the four-field system—see crop rotation) and the blast furnace.
Decomposing increase in output into that due to technology and that due to increase in capital (click to enlarge) The growth accounting model is normally expressed in the form of the exponential growth function. As an abstract example consider an economy whose total output (GDP) grows at 3% per year.