Lessons
- CFA Level 2: Economics - Introduction
- Economic Growth
- Changes in Productivity: The One-Third Rule
- The Productivity Curve
- Economic Growth Theories
- Government Regulation, Deregulation, and Regulatory Behaviour
- Gross Domestic Product (Measuring Economic Activity)
- International Trade & Trade Restrictions
- Balance of Payments
- Foreign Exchange Rate Systems and Parity Relationships
- Foreign Exchange Floating Rate Systems
- Fixed Exchange Rate Systems
- Overview of Currency Markets
- Forward Exchange Rates
- Interest Rate Parity
- Purchasing Power Parity (PPP)
- International Fisher Relation
- Uncovered and Covered Interest Rate Parity Relationship
- Forecasting Exchange Rates
- CFA Level 2 Economics – Recommendations
Changes in Productivity: The One-Third Rule
According to the One Third Rule, the changes in productivity in the US economy can be estimated as follows:
%Δ Productivity = 1/3(%Δ Physical Capital/labor hour) + %Δ Technology
For example, if productivity increased by a total of 3% and the stock of physical capital increased by 3%, then one could infer that 2% of the productivity was caused by advances in technology: 3% = 1/3(3%) + 2%
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