References
The question the Supreme court was asked to adjudicate on was whether Ohio State was right in charging Nico Jacobellis on counts of possessing and exhibiting an obscene film in violation of Ohio law. Society was not able to resolve the dispute within itself and hence the matter reached the Supreme Court, which failed to find consensus amongst its justices and reflected the divergence of opinion within the society.↩︎
The usual method society uses is cost benefit analysis but it requires making a large set of assumptions the results that emerges from the cost benefit analysis are largely dependent on the assumptions. One can get the result one wants from the assumption one chooses to make.↩︎
An excellent article from BBC on the problems tyre dust creates for the local environment. Tyre dust is usually pm2.5 particles and create a bewildering range of health problems for anyone who breathes them in. See Feng et al. (2016) for an good review on the link between pm2.5 and various long-term health conditions.↩︎
Infant mortality rate is that number of death of young children under the age of 1 per 1000 births. Adult literacy rate is percentage of adults considered literate in the society.↩︎
In some parts of the literature, labour is called human capital. While the subtle distinction between labour and human capital can be useful in some instance, the distinction is largely a distraction if one is trying to understand the basic concept of a production function.↩︎
The double of an idea is the idea itself. Put another way, ideas cannot be doubled or halved. While a coffee shop owner can choose to increase the number of workers or use more coffe machines, ideas cannot be increase or decrease in quantity. Thus, in the case of \(A\), \(2A=A\).↩︎
Endogenous growth theory started with Romer (1986) and Lucas Jr (1988).↩︎
It is possible that there is a situation at very low level of capital accumulation that the indirect effect dominates but while that situation is theoretically possible, it is unlikely to occur in reality. For a Cobb Douglas production function where \(y=k^\alpha\) and \(\frac{Y}{L}=A\cdot{}k^\alpha\), the direct impact would always dominate the indirect impact.↩︎
Output cannot easily be transformed into investment good. This implies that resources that produce output can be redirected towards investment goods.↩︎
This follows from the assumption of diminishing marginal product of capital. As the assumption of diminishing marginal product of capital suggests, as we added more capital to the production process, the capital becomes less productive and hence the ratio of the output of falls.↩︎
\(q\)’s relationship with \(A\) is as follows: \(q=(1-\alpha) g_A\).↩︎
Some capital that goes towards depreciation is also the part output that is not added to the capital stocks of the economy↩︎
Net return is gross return minus depreciation.↩︎
Transaction cost is simply the cost in making a economic trade.↩︎
Automated surfaces are surfaces which reduce cost of moving people and cargo↩︎
To keep the text more readable, we will see the term goods to represent goods and services from now on.↩︎
If we combine net investment and depreciation, we get gross investment.↩︎
Over the course of a business cycle the supply exceed demand for goods in the recession and vice-versa in boom. The main reason for this is that prices are slow to respond, which leads to the lack of macroeconomic balance in the short-run.↩︎