Cobb-Douglas: a Model for Growth in the Philippines Essay Example
The economy of the Philippines has been growing positively, with the Gross Domestic Product (GDP) increasing by 2.2% since the last quarter. Currently, the country's GDP stands at 7.8%, surpassing China. This economic progress is attributed to foreign direct investment and remittances. However, despite these improvements, some individuals do not feel the impact of this economic change as persistent issues like reliance on energy imports, demand for Filipino workers overseas, unemployment, and inflation rate increases continue to exist.
To further promote growth and development, the Cob-Douglas Production Function can be used as a model. This model emphasizes the importance of factors such as technology, capital stock, and labor in contributing to high income levels. The equation Y=A(AN) demonstrates that a high GDP or income depends on these variables.
According to the National Statistics Coordination Board (NCSC), approved fo
...reign investments have increased by 86.7% during the first quarter of 2013.With an increase in capital stock (assuming constant technology and population rate), it is expected that the Philippines will continue experiencing growth.
Increasing capital in the Philippines will have positive effects on various government departments and contribute to infrastructure development, enhancing productivity and technology in the country.
The prioritization of departments such as the Department of Agriculture and Department of Education will benefit consumers. The utilization of capital from the public sector, including investments and savings, is crucial for improving these departments. It is essential to maximize natural resources in this agricultural country in order to increase employment rates and productivity in agricultural research and production. The Bureau of Agricultural Statistics reported a 3.3% increase in the agricultural sector in the first quarter of 2013, leading t
more exports.
To improve technological aspects, the private sector should address outdated machinery and techniques in agriculture. This will result in higher employment rates, income, and GDP growth. Investing in education is also vital by increasing schools/classrooms and trained teachers to ensure students receive proper education and values. Depend reported a continuous shortage of teachers in 2012.
Implementing this solution is expected to lead to higher productivity, increased income, and economic growth as more students can be accommodated with more employed teachers. In general, investments in different governmental departments require savings, increased employment rates, improved technology, and income from exports. According to the Cob-Douglas model, as capital, technology, and labor increase so does both income and GDP growth.
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