Total Factor Productivity in Mongolia

Document Type:Research Paper

Subject Area:Economics

Document 1

The distribution and use of capital and labor in an economy define the extent of TFP in an economy. The paper aims to explore the degree of factor productivity in Mongolia based on the diverse views of assimilationists and accumulations. Factors of production could either be accumulated and assimilated. The accumulation view asserts that economic growth in East Asia is as a result of capital accumulation where the principle of diminishing marginal returns on capital sets in as production progresses. This argument corroborates the growth behavior in developing countries over time by their policies. The growth in annual output upon restructuring Mongolia to a market system entirely depends on the accumulation ideology of total factor productivity. The market-based economy enabled widespread investment initiatives in agriculture which constituted the higher percentage of GDP.

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