Summary or Reaction to Annual Report - Essay Example

Summary of information Productivity is the main reason for America’s dominance in the world. There are a number of factors that contribute to productivity and the ultimate economic progress. Firstly we have better infrastructure. We also have better training facilities and opportunities for workers. Another factor is the use of modern technology. Trade has also created a great impact. Trade and free market allow companies to compete at both the national and international level. The path to progress is as a result of the work of companies and staff at the microeconomic level and their overall influence.

This helps to boost the country’s macroeconomic level. The path to progress is dependent on the economy. Productivity is enhanced in two ways. This is either microeconomic or macroeconomic. Microeconomic occurs at the individual level. This includes the organization and effort put out by individual companies while macroeconomic is determined by the overall economic status at the national level. The microeconomic sources of productivity growth can be attributed to investment, innovation, education and training, and trade.

America has been providing many opportunities for investment in recent years. This has been done mostly through improvement in its infrastructure. Technology is responsible for the output and quality of products. In addition to education and training of workers the morale is boosted when there are opportunities for receiving incentives. This will subsequently lead to an increase in output. Trade brings a lot of benefits to the economy. It encourages companies to seek a variety of markets. The search for high quality and lower costs results from international trade.

The macroeconomic sources of productivity growth are not as wide as microeconomic sources but they are just as important. One of the major sources comes in the way of trade. It stimulates economic growth and helps in the reorganization of the economy. Reorganization is also essential at the macroeconomic level. This allows available resources to be extended to many companies. This fosters more working experience for workers, the use of more resources which leads to a growth in the economy. Productivity growth leads to two major types of results.

These can be measured or unmeasured. Measured benefits can be a higher gross domestic product while the unmeasured results are overall improved conditions and standard of living such as greater safety and security and a cleaner environment. Reorganization also allows workers to multitask and to use their skills where they are most needed. Trade also influences the reorganization of jobs at a national level. Competition enhances the proper use of resources and labor. We can learn about macroeconomic productivity from America’s history.

Predominantly an agrarian society, farmers began to increase their output with the introduction of machinery and other types of technology on the farms. This allowed the country to become self sufficient although the industry required less manual labor. As a result potential farm workers migrated to the cities where they seek employment in other industries such as auto and construction industries. When these industries began to use more technology these workers they moved on to service industries such as medical care and management.

Since the last century productivity in the United States has shown to have far reaching results. The increase in output has doubled the income of workers and created other benefits. Another interesting result is the continuous decrease in work hours. The average workweek moved from 76 hours in 1830 to the 34 hours per week that we enjoy today. Compared to that era, in today’s society less work equals more goods and service. Goods and services are also of a higher quality. For much of history productivity remains less than advanced.

American farmers in the 19th century for example were using the same type of agricultural methods that their Europeans were using for many centuries. They had similar living standards as well. Productivity became more prominent with the introduction of industrial capitalism in the 19th century. This enhanced competitiveness among businesses where hard work, discipline and innovation were transformed into success. Companies have to use their resources and skills to attract customers. The success of companies is easily identified in their profits and market shares.

Some persons are apprehensive of the system of capitalism. They fear the job adjustments that come with reorganization. They fail to realize the ultimate benefits that productivity will bring to the society. These persons prefer to remain at the same level that they are accustomed to instead of taking advantage of new opportunities. Micro-productivity and macro-productivity are the ingredients needed for economic progress. It inspires others to create and use resources that will lead to a higher standard of living.

It is productivity that has sparked inventions and improvement in communication, travel, health and business. It is only through the application of these methods, for the most part that modern society is able to enjoy the luxuries of life. A Better Way. 2003 Annual Report – Federal Reserve Bank of Dallas.