11. Productivity - labor efficiency

Increasing the efficiency of labor increases the supply of labor measured in efficiency units. An increase in labor efficiency means that the same amount of labor can produce higher output. It also reduces the demand for other factors through substitution effects. The multiplier properties are demonstrated with and without balanced public budget.


hmtoggle_arrow1A. Labor efficiency
hmtoggle_arrow1B. Labor efficiency - including supply effects on exports
hmtoggle_arrow1C. Labor efficiency - balanced budget