This is a special module on factors of production. This lesson incorporates data as a factor of production, abstract from China (paper The challenges and countermeasures facing China’s construction of a new data factor market system, National Information Center) and Entrepreneurship has been added from the Federal Reserve’s Economic Lowdown Podcast series. Factors of production are building blocks of an economy, both data and entrepreneurship are added to capital, land, and labor as additional factors of production. Further, The middle Road has added Equitable Education as another factor of production. This module is a must for everyone although a recommended lesson for macro and microeconomics. This is part of the Production Cost series taught under Microeconomics online courses on The middle Road.
Quality Equitable Education is recognized by The middle Road as a factor of production, until now it’s not officially recognized by any major government as a factor of production.
Data affects both demand and supply equilibrium *
Data leads to an increase in total factor productivity
40% of labor productivity growth in the US in the last decade
Externality, unstructuredness, non-standardization, variability of resource targets, diminishing marginal costs, increasing returns to scale, etc.
There is a talk on importance of world class biological data centers. Some of them are National Center for Biotechnology Information (NCBI), European Institute of Bioinformatics (EBI), Japan DNA Database (DDBJ).
Increases productivity and economic growth
Positive impact on demand and supply within an economy
Increasing marginal return
An excellent reference for understanding the importance of equitable education is the report: Increasing Returns to Education: Theory and Evidence by Alison L Booth, Melvyn G Coles, and Xiaodong Gong. The report uses a model of educational investment and labor supply in a competitive economy with home and market production. Research estimates a three-equation recursive model of working hours, wages, and years of schooling, and finds empirical support for the main predictions of the model. Heterogeneous workers are assumed to have different productivities both at home and in the workplace. The report concluded increasing returns to education at the labor market participation margin, and elasticity of labor supply concerning wages. One key theoretical contribution of the paper is the presence (or absence) of increasing returns to education is closely related to the elasticity of labor supply with respect to wages.
Increasing Returns to Education: Theory and Evidence Alison L Booth, Melvyn G Coles and Xiaodong Gong