The Effects of Productivity on Growth and Welfare

Saliha Nur Başocak

Abstract


In economies, productivity, which is defined as the proportional size between production inputs and outputs, has effects such as the growth of economies, the ability  to increase the capital stock and increase their savings. Provided that the input amount is kept constant, an increase in outputs means that the economy uses its own resources more effectively and obtains more  products. As a consequence, the resources kept in the economy become growth agents for that economy. Depending on the growth, the increase in gross product will also come to the fore.  As a matter of fact, the increase in gross product, which is the real indicator of growth, will directly reflect on economic growth. Despite the fact that the gross product indicates the per capita amount of national income, the excess of this amount is also one of the criteria of the social welfare level. Depending on the excessive spending power of  individuals, their comfort in meeting their needs  determines the welfare level of  that country.  Therefore, increasing efficieny will need to economic growth and economic growth will contribute to an increase in welfare.  However, in the case of excessive productivity, the level of welfare appears distintctly due to rising unemployment and the possibility of negative movement due to the increasing unemployment and the falling incomes.


Keywords


Productivity, Economic Growth, Welfare

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