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Changes in Productivity: The One-Third Rule

CFA® Exam Level 2, Economics

This lesson is part 3 of 20 in the course Economics

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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‹ Economic Growth

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The Productivity Curve ›

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In this Course

  • 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

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