Followup to last post on Human Resources from an Economics/Modeling perspective
Robert Solow won the 1987 Nobel Prize, the Riksbank Prize in Economic Sciences in honor of Alfred Nobel, for his mathematical modeling of Growth Theory. His 1956 paper, “A Contribution to the Theory of Economic Growth,” lays out an analysis of the contribution of labor to economic growth.
In the standard “before” model, economic growth was “balanced on a knife-edge of equilibrium growth.” Solow’s model replaces labor as a fixed proportion with an analysis that depends on the growth of the workforce.
I found the following from footnote 4 to be particularly intriguing:
If K = 0, r = 0 and the system can’t get started, with no capital there is no input and hence no accumulation.
Labor can be calculated as an input to capital in an economic growth model
[labor = input to capital model]
That model correctly describes and provides a valuable addition to the understanding of labor as a key portion of productivity in a macro environment
[model = crucial capital resource]
Labor is a capital resource.